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BEAR STEARNS ASSET BACKED SECURITIES I LLC,
Depositor
EMC MORTGAGE CORPORATION,
Seller and Company
WELLS FARGO BANK, NATIONAL ASSOCIATION,
Master Servicer and Securities Administrator
and
U.S. BANK NATIONAL ASSOCIATION,
Trustee
____________________
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2005
________________________________________
BEAR STEARNS ASSET BACKED SECURITIES I TRUST 2005-AC1
ASSET-BACKED CERTIFICATES, SERIES 2005-AC1
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TABLE OF CONTENTS
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Page
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ARTICLE I
DEFINITIONS
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Section 1.01 Defined
Terms................................................................................3
Section 1.02 Allocation of Certain Interest
Shortfalls...................................................35
ARTICLE II
CONVEYANCE OF TRUST FUND REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Trust
Fund....................................................................37
Section 2.02 Acceptance of the Mortgage
Loans............................................................39
Section 2.03 Representations, Warranties and Covenants of the
Company, the Master
Servicer and the
Seller.....................................................................41
Section 2.04 Representations and Warranties of the
Depositor.............................................46
Section 2.05 Delivery of Opinion of Counsel in Connection with
Substitutions and Repurchases.............48
Section 2.06 Countersignature and Delivery of
Certificates...............................................48
ARTICLE III
ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY
COMPANY
Section 3.01 The
Company.................................................................................50
Section 3.02 Due-on-Sale Clauses; Assumption
Agreements..................................................51
Section 3.03
Subservicers................................................................................52
Section 3.04 Documents, Records and Funds in Possession of
Company To Be Held for Trustee................53
Section 3.05 Maintenance of Hazard
Insurance.............................................................53
Section 3.06 Presentment of Claims and Collection of
Proceeds............................................54
Section 3.07 Maintenance of the Primary Mortgage Insurance
Policies......................................54
Section 3.08 Fidelity Bond, Errors and Omissions
Insurance...............................................55
Section 3.09 Realization Upon Defaulted Mortgage Loans;
Determination of Excess Liquidation
Proceeds and Realized Losses; Repurchases of Certain Mortgage
Loans.........................55
Section 3.10 Servicing
Compensation......................................................................58
Section 3.11 REO
Property................................................................................58
Section 3.12 Liquidation
Reports.........................................................................59
Section 3.13 Annual Statement as to Compliance; Annual
Certification.....................................59
Section 3.14 Annual Independent Certified Public Accountants'
Servicing Report...........................60
Section 3.15 Books and
Records...........................................................................60
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ARTICLE IV
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER
SERVICER
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Section 4.01 Master
Servicer.............................................................................61
Section 4.02 REMIC-Related
Covenants.....................................................................62
Section 4.03 Monitoring of Company and
Servicer..........................................................62
Section 4.04 Fidelity
Bond...............................................................................63
Section 4.05 Power to Act;
Procedures....................................................................63
Section 4.06 Due-on-Sale Clauses; Assumption
Agreements..................................................64
Section 4.07 Release of Mortgage
Files...................................................................65
Section 4.08 Documents, Records and Funds in Possession of
Master Servicer, Company and
Servicer To Be Held for
Trustee............................................................66
Section 4.09 Standard Hazard Insurance and Flood Insurance
Policies......................................66
Section 4.10 Presentment of Claims and Collection of
Proceeds............................................67
Section 4.11 Maintenance of the Primary Mortgage Insurance
Policies......................................67
Section 4.12 Trustee to Retain Possession of Certain Insurance
Policies and Documents....................68
Section 4.13 Realization Upon Defaulted Mortgage
Loans...................................................68
Section 4.14 Compensation for the Master
Servicer........................................................68
Section 4.15 REO
Property................................................................................69
Section 4.16 Annual Officer's Certificate as to
Compliance...............................................69
Section 4.17 Annual Independent Accountant's Servicing
Report............................................70
Section 4.18 Reports Filed with Securities and Exchange
Commission.......................................70
Section 4.19
UCC.........................................................................................71
Section 4.20 Optional Purchase of Certain Mortgage
Loans.................................................71
ARTICLE V
ACCOUNTS
Section 5.01 Collection of Mortgage Loan Payments; Protected
Account.....................................73
Section 5.02 Permitted Withdrawals From the Protected
Account............................................75
Section 5.03 Reports to Master
Servicer..................................................................76
Section 5.04 Collection of Taxes; Assessments and Similar Items;
Escrow Accounts.........................77
Section 5.05 Servicer Protected
Accounts.................................................................78
Section 5.06 Master Servicer Collection
Account..........................................................79
Section 5.07 Permitted Withdrawals and Transfers from the Master
Servicer Collection Account.............80
Section 5.08 Distribution
Account........................................................................81
Section 5.09 Permitted Withdrawals and Transfers from the
Distribution Account...........................82
ARTICLE VI
DISTRIBUTIONS AND ADVANCES
Section 6.01
Advances....................................................................................84
Section 6.02 Compensating Interest
Payments..............................................................85
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Section 6.03 REMIC
Distributions.........................................................................85
Section 6.04
Distributions...............................................................................85
Section 6.05 Allocation of Realized
Losses...............................................................89
Section 6.06 Monthly Statements to
Certificateholders....................................................90
Section 6.07 REMIC Designations and REMIC I
Distributions................................................93
Section 6.08 Net WAC Reserve
Fund........................................................................95
Section 6.09 Class P Certificate
Account.................................................................95
ARTICLE VII
THE CERTIFICATES
Section 7.01 The
Certificates............................................................................97
Section 7.02 Certificate Register; Registration of Transfer and
Exchange of Certificates.................98
Section 7.03 Mutilated, Destroyed, Lost or Stolen
Certificates..........................................101
Section 7.04 Persons Deemed
Owners......................................................................102
Section 7.05 Access to List of Certificateholders' Names and
Addresses..................................102
Section 7.06 Book-Entry
Certificates....................................................................102
Section 7.07 Notices to
Depository......................................................................103
Section 7.08 Definitive
Certificates....................................................................103
Section 7.09 Maintenance of Office or
Agency............................................................104
ARTICLE VIII
THE COMPANY AND THE MASTER SERVICER
Section 8.01 Liabilities of the Depositor, the Company and the
Master Servicer..........................105
Section 8.02 Merger or Consolidation of the Depositor, the
Company or the Master Servicer...............105
Section 8.03 Indemnification of the Trustee, the Master Servicer
and the Securities Administrator.......105
Section 8.04 Limitations on Liability of the Depositor, the
Company, the Master
Servicer and
Others........................................................................106
Section 8.05 Master Servicer and Company Not to
Resign..................................................107
Section 8.06 Successor Master
Servicer..................................................................108
Section 8.07 Sale and Assignment of Master
Servicing....................................................108
ARTICLE IX
DEFAULT; TERMINATION OF MASTER SERVICER; TERMINATION OF
COMPANY
Section 9.01 Events of
Default..........................................................................110
Section 9.02 Trustee to Act; Appointment of
Successor...................................................111
Section 9.03 Notification to
Certificateholders.........................................................113
Section 9.04 Waiver of
Defaults.........................................................................113
Section 9.05 Company
Default............................................................................114
Section 9.06 Waiver of Company
Defaults.................................................................115
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ARTICLE X
CONCERNING THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
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Section 10.01 Duties of Trustee and Securities
Administrator.............................................116
Section 10.02 Certain Matters Affecting the Trustee and the
Securities Administrator.....................118
Section 10.03 Trustee and Securities Administrator Not Liable
for Certificates
or Mortgage
Loans..........................................................................119
Section 10.04 Trustee and Securities Administrator May Own
Certificates..................................120
Section 10.05 Trustee's and Securities Administrator's Fees and
Expenses.................................120
Section 10.06 Eligibility Requirements for Trustee and
Securities Administrator..........................121
Section 10.07
Insurance..................................................................................121
Section 10.08 Resignation and Removal of Trustee and Securities
Administrator............................121
Section 10.09 Successor Trustee or Securities
Administrator..............................................122
Section 10.10 Merger or Consolidation of Trustee or Securities
Administrator.............................123
Section 10.11 Appointment of Co-Trustee or Separate
Trustee..............................................123
Section 10.12 Tax
Matters................................................................................124
ARTICLE XI
TERMINATION
Section 11.01 Termination upon Liquidation or Repurchase of all
Mortgage Loans...........................128
Section 11.02 Final Distribution on the
Certificates.....................................................128
Section 11.03 Additional Termination
Requirements........................................................130
ARTICLE XII
MISCELLANEOUS PROVISIONS
Section 12.01
Amendment..................................................................................131
Section 12.02 Recordation of Agreement;
Counterparts.....................................................132
Section 12.03 Governing
Law..............................................................................132
Section 12.04 Intention of
Parties.......................................................................133
Section 12.05
Notices....................................................................................133
Section 12.06 Severability of
Provisions.................................................................134
Section 12.07
Assignment.................................................................................134
Section 12.08 Limitation on Rights of
Certificateholders.................................................134
Section 12.09 Inspection and Audit
Rights................................................................135
Section 12.10 Certificates Nonassessable and Fully
Paid..................................................136
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Exhibits
Exhibit A-1 Form of Class A Certificates
Exhibit A-2 Form of Class M-[1][2][3] Certificates
Exhibit A-3 Form of Class B-[1][2][3] Certificates
Exhibit A-4 Form of Class C Certificates
Exhibit A-5 Form of Class P Certificates
Exhibit A-6 Form of Class R-[1][2] Certificates
Exhibit B Mortgage Loan Schedule
Exhibit C Form of Transfer Affidavit
Exhibit D Form of Transferor Certificate
Exhibit E Form of Investment Letter (Non-Rule 144A)
Exhibit F Form of Rule 144A Investment Letter
Exhibit G Form of Request for Release
Exhibit H DTC Letter of Representations
Exhibit I Schedule of Mortgage Loans with Lost Notes
Exhibit J Form of Custodial Agreement
Exhibit K Form of Company Certification
Exhibit L Form of Mortgage Loan Purchase Agreement
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POOLING AND SERVICING AGREEMENT, dated as of January 1, 2005,
among
BEAR STEARNS ASSET BACKED SECURITIES I LLC, a Delaware limited
liability
company, as depositor (the "Depositor"), EMC MORTGAGE
CORPORATION, a Delaware
corporation, as seller (in such capacity, the "Seller") and as
company (in such
capacity, the "Company"), WELLS FARGO BANK, NATIONAL
ASSOCIATION, a national
banking association, as master servicer (in such capacity, the
"Master
Servicer") and as securities administrator (in such capacity,
the "Securities
Administrator") and U.S. BANK NATIONAL ASSOCIATION, a national
banking
association, not in its individual capacity, but solely as
trustee (the
"Trustee").
PRELIMINARY STATEMENT
The Depositor is the owner of the Trust Fund that is hereby
conveyed to
the Trustee in return for the Certificates.
REMIC I
-------
As provided herein, the Trustee will make an election to treat
the
segregated pool of assets consisting of the Mortgage Loans and
certain other
related assets subject to this Agreement as a real estate
mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such
segregated pool of
assets will be designated as "REMIC I." The Class R-1
Certificates will
represent the sole class of "residual interests" in REMIC I for
purposes of the
REMIC Provisions (as defined herein) under federal income tax
law. The following
table irrevocably sets forth the designation, the Uncertificated
REMIC I
Pass-Through Rate, the initial Uncertificated Principal Balance,
and solely for
purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the
"latest possible maturity date" for each of the REMIC I Regular
Interests. None
of the REMIC I Regular Interests will be certificated.
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Initial Uncertificated Uncertificated REMIC I Assumed Final
Designation Principal Balance Pass-Through Rate Maturity
Date(1)
----------- ----------------- -----------------
----------------
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AA $ 210,907,821.98 Variable (2) February 25, 2035
A $ 1,544,140.00 Variable (2) February 25, 2035
M-1 $ 274,400.00 Variable (2) February 25, 2035
M-2 $ 122,670.00 Variable (2) February 25, 2035
M-3 $ 41,960.00 Variable (2) February 25, 2035
B-1 $ 50,580.00 Variable (2) February 25, 2035
B-2 $ 33,360.00 Variable (2) February 25, 2035
B-3 $ 65,640.00 Variable (2) February 25, 2035
ZZ $ 2,171,491.26 Variable (2) February 25, 2035
P $ 100.00 0.00% February 25, 2035
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___________________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury
regulations, the Distribution Date in the month following the
maturity date for
the Mortgage Loan with the latest maturity date has been
designated as the
"latest possible maturity date" for each Class of Certificates
that represents
one or more of the "regular interests" in REMIC I.
(2) Calculated in accordance with the definition of
"Uncertificated REMIC I
Pass-Through Rate" herein.
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REMIC II
--------
As provided herein, the Trustee will make an election to treat
the
segregated pool of assets consisting of the REMIC I Regular
Interests as a REMIC
for federal income tax purposes, and such segregated pool of
assets will be
designated as "REMIC II". The Class R-2 Certificates will
represent the sole
class of "residual interests" in REMIC II for purposes of the
REMIC Provisions.
The following table irrevocably sets forth the Class
designation,
Pass-Through Rate and Initial Certificate Principal Balance for
each Class of
Certificates that represents one or more of the "regular
interests" in REMIC II
created hereunder.
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Initial Certificate Assumed Final
Class Designation Principal Balance Pass-Through Rate Maturity
Date(1)
----------------- ----------------- -----------------
----------------
<S> <C> <C> <C>
Class A $ 154,414,000.00 Class A Pass-Through Rate February 25,
2035
Class M-1 $ 27,440,000.00 Class M-1 Pass-Through Rate February
25, 2035
Class M-2 $ 12,267,000.00 Class M-2 Pass-Through Rate February
25, 2035
Class M-3 $ 4,196,000.00 Class M-3 Pass-Through Rate February
25, 2035
Class B-1 $ 5,058,000.00 Class B-1 Pass Through Rate February
25, 2035
Class B-2 $ 3,336,000.00 Class B-2 Pass-Through Rate February
25, 2035
Class B-3 $ 6,564,000.00 Class B-3 Pass Through Rate February
25, 2035
Class C $ 1,937,063.24(3) (2) February 25, 2035
Class P $ 100.00(4) N/A(4) February 25, 2035
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_______________
(1) For purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury
regulations, the Distribution Date in the month following the
maturity
date for the Mortgage Loan with the latest maturity date has
been
designated as the "latest possible maturity date" for each Class
of
Certificates that represents one or more of the "regular
interests" in
REMIC II.
(2) Calculated in accordance with the definition of
"Pass-Through Rate"
herein.
(3) The Class C Certificates will not accrue interest on its
Certificate
Principal Balance, but will accrue interest on its Certificate
Notional
Amount as described herein.
(4) The Class P Certificates are not entitled to distributions
in respect
of interest.
The Trust Fund shall be named, and may be referred to as, the
"Bear
Stearns Asset Backed Securities I Trust 2005-AC1." The
Certificates issued
hereunder may be referred to as "Asset-Backed Certificates
Series 2005-AC1"
(including for purposes of any endorsement or assignment of a
Mortgage Note or
Mortgage).
In consideration of the mutual agreements herein contained,
the
Depositor, the Master Servicer, the Securities Administrator,
the Seller, the
Company and the Trustee agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01 DEFINED TERMS.
In addition to those terms defined in Section 1.02, whenever
used in
this Agreement, the following words and phrases, unless the
context otherwise
requires, shall have the following meanings:
ACCEPTED MASTER SERVICING PRACTICES: With respect to any
Mortgage Loan
those customary mortgage servicing practices of prudent mortgage
servicing
institutions that master service mortgage loans of the same type
and quality as
such Mortgage Loan in the jurisdiction where the related
Mortgaged Property is
located, to the extent applicable to the Trustee or the Master
Servicer (except
in its capacity as successor to the Company or the related
Servicer).
ACCEPTED SERVICING PRACTICES: With respect to each EMC Mortgage
Loan,
those mortgage servicing practices (including collection
procedures) that are in
accordance with all applicable statutes, regulations and prudent
mortgage
banking practices for similar mortgage loans.
ACCOUNT: The Distribution Account, the Master Servicer
Collection
Account, the Net WAC Reserve Fund and any Protected Account.
ACCRUAL PERIOD: With respect to the Class A Certificates and
Class C
Certificates and any Distribution Date, the calendar month
immediately preceding
such Distribution Date. With respect to the Class M-1, Class
M-2, Class M-3,
Class B-1, Class B-2 and Class B-3 Certificates and any
Distribution Date, the
period from and including the 25th day of the calendar month
preceding the
calendar month in which the Distribution Date occurs (or, with
respect to the
first Accrual Period for the Class M Certificates and Class B
Certificates, the
Closing Date) to and including the 24th day of the calendar
month in which such
Distribution Date occurs. All calculations of interest on the
Class A
Certificates and Class C Certificates will be made on the basis
of a 360-day
year consisting of twelve 30-day months. All calculations of
interest on the
Class M Certificates and Class B Certificates will be made on
the basis of the
actual number of days elapsed in the related Accrual Period.
ADDITIONAL MASTER SERVICING COMPENSATION: The meaning specified
in
Section 4.14.
ADVANCE: An advance of delinquent payments of principal or
interest in
respect of a Mortgage Loan required to be made by the Company as
provided in
Section 6.01(a) hereof, by the related Servicer in accordance
with the related
Servicing Agreement or by the Master Servicer as provided in
Section 6.01(b)
hereof.
AGREEMENT: This Pooling and Servicing Agreement and any and
all
amendments or supplements hereto made in accordance with the
terms herein.
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AMOUNT HELD FOR FUTURE DISTRIBUTION: As to any Distribution
Date, the
aggregate amount held in the Company's or the related Sevicer's
Protected
Account at the close of business on the immediately preceding
Determination Date
on account of (i) all Scheduled Payments or portions thereof
received in respect
of the Mortgage Loans due after the related Due Period and (ii)
Principal
Prepayments, Liquidation Proceeds and Insurance Proceeds
received in respect of
such Mortgage Loans after the last day of the related Prepayment
Period.
APPLIED REALIZED LOSS AMOUNT: With respect to any Distribution
Date and
a Class of Subordinate Certificates the sum of the Realized
Losses with respect
to the Mortgage Loans which have been applied in reduction of
the Certificate
Principal Balance of that Class of Certificates pursuant to
Section 6.05 of this
Agreement, which have not previously been reimbursed.
APPRAISED VALUE: With respect to any Mortgage Loan originated
in
connection with a refinancing, the appraised value of the
Mortgaged Property
based upon the appraisal made at the time of such refinancing
or, with respect
to any other Mortgage Loan, the lesser of (x) the appraised
value of the
Mortgaged Property based upon the appraisal made by a fee
appraiser at the time
of the origination of the related Mortgage Loan, and (y) the
sales price of the
Mortgaged Property at the time of such origination.
ASSIGNMENT AGREEMENT: Shall mean any of the Southtrust
Assignment
Agreement, the Cendant Assignment Agreement, Greenpoint
Assignment Agreement, or
the HSBC Assignment Agreement.
AVAILABLE FUNDS: The sum of Interest Funds and Principal Funds
with
respect to the Mortgage Loans.
BANKRUPTCY CODE: Title 11 of the United States Code.
BASIC PRINCIPAL DISTRIBUTION AMOUNT: Shall mean, with respect to
any
Distribution Date, the lesser of (a) the excess of (i) the
Available Funds for
such Distribution Date over (ii) the aggregate Monthly Interest
Distributable
Amount for the Certificates (other than the Class P, Class C and
Class R
Certificates) for such Distribution Date and (b) the excess of
(i) Principal
Remittance Amount for such Distribution Date over (ii) the
Overcollateralization
Release Amount, if any, for such Distribution Date.
BISHOP'S GATE: Bishop's Gate Residential Mortgage Trust, and
any
successor thereto.
BOOK-ENTRY CERTIFICATES: Any of the Certificates that shall
be
registered in the name of the Depository or its nominee, the
ownership of which
is reflected on the books of the Depository or on the books of a
person
maintaining an account with the Depository (directly, as a
"Depository
Participant", or indirectly, as an indirect participant in
accordance with the
rules of the Depository and as described in Section 7.06). As of
the Closing
Date, each Class of Regular Certificates constitutes a Class of
Book-Entry
Certificates.
BUSINESS DAY: Any day other than (i) a Saturday or a Sunday, or
(ii) a
day on which banking institutions in The City of New York, New
York,
Minneapolis, Minnesota, Columbia, Maryland or the city in which
the Corporate
Trust Office of the Trustee or the principal office of
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<PAGE>
the Company or the Master Servicer is located are authorized or
obligated by law
or executive order to be closed.
CENDANT: Cendant Mortgage Corporation, and any successor
thereto.
CENDANT ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition Agreement, dated as of January 31, 2005, by and
among the Seller,
Cendant, Bishop's Gate and the Trustee evidencing the assignment
of the Cendant
Servicing Agreement to the Trust.
CENDANT LOANS: Those Mortgage Loans subject to this Agreement
which
were purchased by the Seller from Cendant and Bishop's Gate
pursuant to the
Cendant Servicing Agreement.
CENDANT SERVICING AGREEMENT: The Purchase, Warranties and
Servicing
Agreement, dated as of October 23, 2001, by and among the
Seller, Cendant and
Bishop's Gate, as modified by the Cendant Assignment
Agreement.
CERTIFICATE: Any one of the certificates of any Class executed
and
authenticated by the Trustee in substantially the forms attached
hereto as
Exhibits A-1 through A-6.
CERTIFICATE NOTIONAL AMOUNT: As to the Class C Certificates and
any
Distribution Date, an amount equal to the aggregate Stated
Principal Balance of
the Mortgage Loans . The initial Certificate Notional Amount of
the Class C
Certificates shall be $215,212,063.24. For federal income tax
purposes, however,
the Class C Certificates will have a Certificate Notional Amount
equal to the
aggregate of the Uncertificated Principal Balances of the REMIC
I Regular
Interests (other than REMIC I Regular Interest P).
CERTIFICATE OWNER: With respect to a Book-Entry Certificate, the
Person
that is the beneficial owner of such Book-Entry Certificate.
CERTIFICATE PRINCIPAL BALANCE: As to any Certificate (other than
any
Class C or Class R Certificate) and as of any Distribution Date,
the Initial
Certificate Principal Balance of such Certificate plus any
Subsequent Recoveries
added to the Certificate Principal Balance of such Certificate
pursuant to
Section 6.05 less the sum of (i) all amounts distributed with
respect to such
Certificate in reduction of the Certificate Principal Balance
thereof on
previous Distribution Dates pursuant to Section 6.04 and (ii)
any Applied
Realized Loss Amounts allocated to such Certificate on previous
Distribution
Dates.
CERTIFICATE REGISTER: The register maintained pursuant to
Section 7.02
hereof.
CERTIFICATEHOLDER OR HOLDER: The person in whose name a
Certificate is
registered in the Certificate Register (initially, Cede &
Co., as nominee for
the Depository, in the case of any Book-Entry Certificates).
CLASS: All Certificates bearing the same Class designation as
set forth
in Section 7.01 hereof.
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CLASS A CERTIFICATE: Any Certificate designated as a "Class
A
Certificate" on the face thereof, in the form of Exhibit A-1
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class A Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS A PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Optional Termination Date,
5.500% per annum,
subject to a cap equal to the related Net WAC Rate Cap for such
Distribution
Date and (ii) for each Distribution Date thereafter, 6.000% per
annum, subject
to a cap equal to the related Interest Rate Cap for such
Distribution Date.
CLASS B CERTIFICATES: Any of the Class B-1, Class B-2 and Class
B-3
Certificates.
CLASS B-1 CERTIFICATE: Any Certificate designated as a "Class
B-1
Certificate" on the face thereof, in the form of Exhibit A-3
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class B-1 Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS B-1 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Optional Termination Date,
One-Month LIBOR plus
1.250% per annum and (ii) for each Distribution Date thereafter,
One-Month LIBOR
plus 1.875% per annum, in each case subject to a cap equal to
the related
Interest Rate Cap for such Distribution Date.
CLASS B-2 CERTIFICATE: Any Certificate designated as a "Class
B-2
Certificate" on the face thereof, in the form of Exhibit A-3
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class B-2 Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS B-2 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Optional Termination Date,
One-Month LIBOR plus
1.300% per annum and (ii) for each Distribution Date thereafter,
One-Month LIBOR
plus 1.950% per annum, in each case subject to a cap equal to
the related
Interest Rate Cap for such Distribution Date.
CLASS B-3 CERTIFICATE: Any Certificate designated as a "Class
B-3
Certificate" on the face thereof, in the form of Exhibit A-3
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class B-3 Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II
CLASS B-3 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Optional Termination Date,
One-Month LIBOR plus
2.150% per annum and (ii) for each Distribution Date thereafter,
One-Month LIBOR
plus 3.225% per annum, in each case subject to a cap equal to
the related
Interest Rate Cap for such Distribution Date.
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CLASS C CERTIFICATE: Any Certificate designated as a "Class
C
Certificate" on the face thereof, in the form of Exhibit A-4
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class C Certificates herein and evidencing a Regular
Interest in REMIC II.
CLASS C DISTRIBUTION AMOUNT: With respect to any Distribution
Date, the
sum of (i) the Monthly Interest Distributable Amount for the
Class C
Certificates for such Distribution Date (ii) any
Overcollateralization Release
Amount for such Distribution Date and (iii) without duplication,
any Subsequent
Recoveries not distributed to the Class A Certificates and Class
M Certificates
on such Distribution Date; provided, however, that on and after
the Distribution
Date on which the Certificate Principal Balance of the Offered
Certificates has
been reduced to zero, the Class C Distribution Amount shall
include the
Overcollateralized Amount.
CLASS M CERTIFICATES: Any of the Class M-1, Class M-2 and Class
M-3
Certificates.
CLASS M-1 CERTIFICATE: Any Certificate designated as a "Class
M-1
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class M-1 Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS M-1 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Optional Termination Date,
One-Month LIBOR plus
0.500% per annum and (ii) for each Distribution Date thereafter,
One-Month LIBOR
plus 0.750% per annum, in each case subject to a cap equal to
the related
Interest Rate Cap for such Distribution Date.
CLASS M-2 CERTIFICATE: Any Certificate designated as a "Class
M-2
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class M-2 Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS M-2 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Optional Termination Date,
One-Month LIBOR plus
0.750% per annum and (ii) for each Distribution Date thereafter,
One-Month LIBOR
plus 1.125% per annum, in each case subject to a cap equal to
the related
Interest Rate Cap for such Distribution Date.
CLASS M-3 CERTIFICATE: Any Certificate designated as a "Class
M-3
Certificate" on the face thereof, in the form of Exhibit A-2
hereto,
representing the right to the Percentage Interest of
distributions provided for
the Class M-3 Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
CLASS M-3 PASS-THROUGH RATE: Shall mean (i) on any Distribution
Date
which occurs on or prior to the Optional Termination Date,
One-Month LIBOR plus
0.800% per annum and (ii) for each Distribution Date thereafter,
One-Month LIBOR
plus 1.200% per annum, in each case subject to a cap equal to
the related
Interest Rate Cap for such Distribution Date.
CLASS P CERTIFICATE: Any Certificate designated as a "Class
P
Certificate" on the face thereof, in the form of Exhibit A-5
hereto,
representing the right to its Percentage Interest of
distributions provided for
the Class P Certificates as set forth herein and evidencing a
Regular Interest
in REMIC II.
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CLASS P CERTIFICATE ACCOUNT: The account established and
maintained by
the Trustee pursuant to Section 6.10 hereof.
CLASS R CERTIFICATES: Any of the Class R-1 Certificates or Class
R-2
Certificates.
CLASS R-1 CERTIFICATE: Any Certificate designated a "Class
R-1
Certificate" on the face thereof, in substantially the form set
forth in Exhibit
A-6 hereto, evidencing the Residual Interest in REMIC I and
representing the
right to the Percentage Interest of distributions provided for
the Class R-1
Certificates as set forth herein.
CLASS R-2 CERTIFICATE: Any Certificate designated a "Class
R-2
Certificate" on the face thereof, in substantially the form set
forth in Exhibit
A-6 hereto, evidencing the Residual Interest in REMIC II and
representing the
right to the Percentage Interest of distributions provided for
the Class R-2
Certificates as set forth herein.
CLOSING DATE: January 31, 2005.
CODE: The Internal Revenue Code of 1986, including any successor
or
amendatory provisions.
COMPANY: EMC.
COMPENSATING INTEREST: An amount, not to exceed the Servicing
Fee, to
be deposited in the Master Servicer Collection Account by the
Company or the
related Servicer to the payment of a Prepayment Interest
Shortfall on a Mortgage
Loan subject to this Agreement; provided that in the event the
Company or the
related Servicer fails to make such payment, the Master Servicer
shall be
obligated to do so to the extent provided in Section 6.02(c)
hereof.
CORPORATE TRUST OFFICE: The designated office of the Trustee
where at
any particular time its corporate trust business with respect to
this Agreement
shall be administered, which office at the date of the execution
of this
Agreement is located at US Bank Corporate Trust Services, One
Federal Street,
3rd Floor, Boston, Massachusetts 02110, Attention: Corporate
Trust
Services/BSABS I 2005-AC1, or at such other address as the
Trustee may designate
from time to time.
CORRESPONDING CERTIFICATE: With respect to each REMIC I
Regular
Interest (other than REMIC I Regular Interests AA and ZZ), the
Certificate with
the corresponding designation.
CROSS-OVER DATE: The first Distribution Date on which the
aggregate
Certificate Principal Balance of the Subordinate Certificates
has been reduced
to zero (giving effect to all distributions on such Distribution
Date).
CUSTODIAL AGREEMENT: An agreement, dated as of January 31, 2005,
among
the Depositor, the Seller, the Trustee and the Custodian in
substantially the
form of Exhibit J hereto.
CUSTODIAN: Wells Fargo Bank, National Association, or any
successor
custodian appointed pursuant to the provisions hereof and the
Custodial
Agreement.
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CUT-OFF DATE: The close of business on January 1, 2005.
CUT-OFF DATE PRINCIPAL BALANCE: As to any Mortgage Loan, the
unpaid
principal balance thereof as of the close of business on the
Cut-off Date after
application of all Principal Prepayments received prior to the
Cut-off Date and
scheduled payments of principal due on or before the Cut-off
Date, whether or
not received, but without giving effect to any installments of
principal
received in respect of Due Dates after the Cut-off Date.
DEBT SERVICE REDUCTION: With respect to any Mortgage Loan, a
reduction
by a court of competent jurisdiction in a proceeding under the
Bankruptcy Code
in the Scheduled Payment for such Mortgage Loan that became
final and
non-appealable, except such a reduction resulting from a
Deficient Valuation or
any other reduction that results in a permanent forgiveness of
principal.
DEFICIENT VALUATION: With respect to any Mortgage Loan, a
valuation by
a court of competent jurisdiction of the Mortgaged Property in
an amount less
than the then outstanding indebtedness under such Mortgage Loan,
or any
reduction in the amount of principal to be paid in connection
with any Scheduled
Payment that results in a permanent forgiveness of principal,
which valuation or
reduction results from an order of such court that is final and
non-appealable
in a proceeding under the Bankruptcy Code.
DEFINITIVE CERTIFICATES: As defined in Section 7.06.
DELETED MORTGAGE LOAN: A Mortgage Loan replaced or to be
replaced by a
Replacement Mortgage Loan.
DELINQUENT: A Mortgage Loan is "delinquent" if any payment due
thereon
is not made pursuant to the terms of such Mortgage Loan by the
close of business
on the day such payment is scheduled to be due. A Mortgage Loan
is "30 days
delinquent" if such payment has not been received by the close
of business on
the corresponding day of the month immediately succeeding the
month in which
such payment was due, or, if there is no such corresponding day
(e.g., as when a
30-day month follows a 31-day month in which a payment was due
on the 31st day
of such month), then on the last day of such immediately
succeeding month.
Similarly for "60 days delinquent," "90 days delinquent" and so
on.
DENOMINATION: With respect to each Certificate, the amount set
forth on
the face thereof as the "Initial Principal Balance of this
Certificate".
DEPOSITOR: Bear Stearns Asset Backed Securities I LLC, a
Delaware
limited liability company, or its successor in interest.
DEPOSITORY: The initial Depository shall be The Depository
Trust
Company ("DTC"), the nominee of which is Cede & Co., or any
other organization
registered as a "clearing agency" pursuant to Section 17A of the
Securities
Exchange Act of 1934, as amended. The Depository shall initially
be the
registered Holder of the Book-Entry Certificates. The Depository
shall at all
times be a "clearing corporation" as defined in Section
8-102(a)(5) of the
Uniform Commercial Code of the State of New York.
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DEPOSITORY AGREEMENT: With respect to the Class of
Book-Entry
Certificates, the agreement among the Depositor, the Trustee and
the initial
Depository, dated as of the Closing Date, substantially in the
form of Exhibit
H.
DEPOSITORY PARTICIPANT: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a
Depository effects
book-entry transfers and pledges of securities deposited with
the Depository.
DETERMINATION DATE: With respect to any Distribution Date, the
15th day
of the month of such Distribution Date or, if such 15th day is
not a Business
Day, the immediately preceding Business Day.
DISTRIBUTION ACCOUNT: The separate Eligible Account created
and
maintained by the Trustee pursuant to Section 5.08 in the name
of the Trustee
for the benefit of the Certificateholders and designated "U.S.
Bank National
Association, in trust for registered holders of Bear Stearns
Asset Backed
Securities I LLC, Asset-Backed Certificates, Series 2005-AC1"
shall be held in
trust for the Certificateholders for the uses and purposes set
forth in this
Agreement.
DISTRIBUTION ACCOUNT DEPOSIT DATE: As to any Distribution Date,
on or
before 3:00 p.m. Eastern time on the Business Day immediately
preceding such
Distribution Date.
DISTRIBUTION DATE: The 25th day of each calendar month after
the
initial issuance of the Certificates, or if such 25th day is not
a Business Day,
the next succeeding Business Day, commencing in February
2005.
DUE DATE: As to any Mortgage Loan, the date in each month on
which the
related Scheduled Payment is due, as set forth in the related
Mortgage Note.
DUE PERIOD: With respect to any Distribution Date, the period
from the
second day of the calendar month preceding the calendar month in
which such
Distribution Date occurs through close of business on the first
day of the
calendar month in which such Distribution Date occurs.
ELIGIBLE ACCOUNT: Any of (i) an account or accounts maintained
with a
federal or state chartered depository institution or trust
company, the
long-term unsecured debt obligations and short-term unsecured
debt obligations
of which (or, in the case of a depository institution or trust
company that is
the principal subsidiary of a holding company, the debt
obligations of such
holding company, so long as Moody's is not a Rating Agency) are
rated by each
Rating Agency in one of its two highest long-term and its
highest short-term
rating categories respectively, at the time any amounts are held
on deposit
therein, or (ii) an account or accounts in a depository
institution or trust
company in which such accounts are insured by the FDIC (to the
limits
established by the FDIC) and the uninsured deposits in which
accounts are
otherwise secured such that, as evidenced by an Opinion of
Counsel delivered to
the Trustee and to each Rating Agency, the Certificateholders
have a claim with
respect to the funds in such account or a perfected first
priority security
interest against any collateral (which shall be limited to
Permitted
Investments) securing such funds that is superior to claims of
any other
depositors or creditors of the depository institution or trust
company in which
such account is maintained, or (iii) a trust
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account or accounts maintained with the corporate trust
department of a federal
or state chartered depository institution or trust company
having capital and
surplus of not less than $50,000,000, acting in its fiduciary
capacity or (iv)
any other account acceptable to the Rating Agencies. Eligible
Accounts may bear
interest, and may include, if otherwise qualified under this
definition,
accounts maintained with the Trustee.
EMC: EMC Mortgage Corporation, a Delaware corporation.
EMC MORTGAGE LOANS: Those Mortgage Loans serviced by the
Company
pursuant to the terms of this Agreement.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
ERISA RESTRICTED CERTIFICATES: Any of the Class C, Class P and
Residual
Certificates.
EVENT OF DEFAULT: As defined in Section 9.01 hereof.
EXCESS LIQUIDATION PROCEEDS: To the extent not required by law
to be
paid to the related Mortgagor, the excess, if any, of any
Liquidation Proceeds
with respect to a Mortgage Loan over the Stated Principal
Balance of such
Mortgage Loan and accrued and unpaid interest at the related
Mortgage Rate
through the last day of the month in which the Mortgage Loan has
been
liquidated.
EXCESS SPREAD: With respect to any Distribution Date is the
excess, if
any, of the Interest Funds for such Distribution Date over the
Monthly Interest
Distributable Amounts payable to the Offered Certificates on
such Distribution
Date.
EXEMPTION: Prohibited Transaction Exemption 90-30, as amended
from time
to time.
EXTRA PRINCIPAL DISTRIBUTION AMOUNT: With respect to any
Distribution
Date (a) on or prior to the earlier of (1) the 20% Clean-Up Call
Date and (2)
the Distribution Date in January 2015, the lesser of (x) the
Excess Spread for
such Distribution Date and (y) the Overcollateralization
Increase Amount for
such Distribution Date; and (b) thereafter, the Excess Spread
for such
Distribution Date.
FANNIE MAE: Fannie Mae (formerly, Federal National Mortgage
Association), or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation, or any
successor
thereto.
FINAL RECOVERY DETERMINATION: With respect to any defaulted
Mortgage
Loan or any REO Property (other than a Mortgage Loan or REO
Property purchased
by the Seller or the Class C Certificateholder pursuant to or as
contemplated by
Section 2.03(c) or Section 11.01), a determination made by the
Company pursuant
to this Agreement or the applicable Servicer pursuant to the
related Servicing
Agreement that all Insurance Proceeds, Liquidation Proceeds and
other payments
or recoveries which the Company or such Servicer, in its
reasonable good faith
judgment, expects to be finally recoverable in respect thereof
have been so
recovered. The
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Master Servicer shall maintain records, based solely on
information provided by
each Servicer, of each Final Recovery Determination made
thereby.
FIRREA: The Financial Institutions Reform, Recovery, and
Enforcement
Act of 1989.
FISCAL QUARTER: December 1 to February 29 (or the last day in
such
month), March 1 to May 31, June 1 to August 31, or September to
November 30, as
applicable.
FREDDIE MAC: Freddie Mac (formerly The Federal Home Loan
Mortgage
Corporation), or any successor thereto.
GREENPOINT: GreenPoint Mortgage Funding, Inc., and any
successor
thereto.
GREENPOINT ASSIGNMENT AGREEMENT: The Assignment, Assumption
and
Recognition Agreement, dated as of January 31, 2005, by and
among the Seller,
GreenPoint and the Trustee evidencing the assignment of the
GreenPoint Servicing
Agreement to the Trust.
GREENPOINT LOANS: Those Mortgage Loans subject to this Agreement
which
were purchased by the Seller from GreenPoint pursuant to the
GreenPoint
Servicing Agreement.
GREENPOINT SERVICING AGREEMENT: Shall mean the Purchase,
Warranties and
Servicing Agreement, dated as of September 1, 2003, by and
between the Seller
and GreenPoint, as modified by the GreenPoint Assignment
Agreement.
HSBC: HSBC Mortgage Corporation (USA), and any successor
thereto.
HSBC ASSIGNMENT AGREEMENT: The Assignment, Assumption and
Recognition
Agreement, dated as of January 31, 2005, by and among the
Seller, HSBC and the
Trustee evidencing the assignment of the HSBC Servicing
Agreement to the Trust.
HSBC LOANS: Those Mortgage Loans subject to this Agreement which
were
purchased by the Seller from HSBC pursuant to the HSBC Servicing
Agreement.
HSBC SERVICING AGREEMENT: Shall mean the Purchase, Warranties
and
Servicing Agreement, dated as of May 1, 2002, by and between the
Seller and
HSBC, as modified by the HSBC Assignment Agreement.
INDEMNIFIED PERSONS: The Trustee, the Master Servicer, the
Company, the
Trust Fund and the Securities Administrator and their officers,
directors,
agents and employees and, with respect to the Trustee, any
separate co-trustee
and its officers, directors, agents and employees.
INITIAL CERTIFICATE PRINCIPAL BALANCE: With respect to any
Certificate,
the Certificate Principal Balance of such Certificate or any
predecessor
Certificate on the Closing Date.
INSURANCE POLICY: With respect to any Mortgage Loan included in
the
Trust Fund, any insurance policy or LPMI Policy, including all
riders and
endorsements thereto in effect with respect to such Mortgage
Loan, including any
replacement policy or policies for any Insurance Policies.
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INSURANCE PROCEEDS: Proceeds paid in respect of the Mortgage
Loans
pursuant to any Insurance Policy or any other insurance policy
covering a
Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under
the Mortgage, the Company, the related Servicer or the trustee
under the deed of
trust and are not applied to the restoration of the related
Mortgaged Property
or released to the Mortgagor in accordance with the procedures
that the Company
or the related Servicer would follow in servicing mortgage loans
held for its
own account, in each case other than any amount included in such
Insurance
Proceeds in respect of Insured Expenses.
INSURED EXPENSES: Expenses covered by an Insurance Policy or any
other
insurance policy with respect to the Mortgage Loans.
INTEREST DETERMINATION DATE: Shall mean the second LIBOR
Business Day
preceding the commencement of each Accrual Period. INTEREST
FUNDS: For any
Distribution Date, (i) the sum, without duplication, of (a) all
scheduled
interest during the related Due Period with respect to the
related Mortgage
Loans less the Servicing Fee, the Master Servicing Fee and the
LPMI Fee, if any,
(b) all Advances relating to interest with respect to the
related Mortgage Loans
made on or prior to the related Distribution Account Deposit
Date, (c) all
Compensating Interest with respect to the related Mortgage Loans
required to be
remitted by the Company or the Master Servicer pursuant to this
Agreement or the
related Servicer pursuant to the related Servicing Agreement
with respect to
such Distribution Date, (d) Liquidation Proceeds and Subsequent
Recoveries with
respect to the related Mortgage Loans collected during the
related Prepayment
Period (to the extent such Liquidation Proceeds and Subsequent
Recoveries relate
to interest), (e) all amounts relating to interest with respect
to each Mortgage
Loan repurchased by the Seller pursuant to Sections 2.02 and
2.03 and by EMC
pursuant to Section 4.20 and (f) all amounts in respect of
interest paid by the
Master Servicer pursuant to Section 11.01, in each case to the
extent remitted
by the Company or the related Servicer, as applicable, to the
Distribution
Account pursuant to this Agreement or the related Servicing
Agreement minus (ii)
all amounts relating to interest required to be reimbursed
pursuant to Sections
5.02, 5.05, 5.07 and 5.09 or as otherwise set forth in this
Agreement.
INTEREST RATE CAP: With respect to the Class A Certificates and
on any
Distribution Date, the weighted average of the Net Mortgage
Rates of the
Mortgage Loans for such Distribution Date.
With respect to the Class M Certificates and Class B
Certificates and
any Distribution Date, the lesser of (i) 11.00% per annum and
(ii) the weighted
average of the Net Mortgage Rates of the Mortgage Loans for such
Distribution
Date.
For federal income tax purposes and for purposes of this
calculation,
the weighted average of the Net Mortgage Rates of the Mortgage
Loans shall
equal, with respect to each of the Class A, Class M and Class B
Certificates,
the Uncertificated REMIC I Pass-Through Rate on the REMIC I
Regular Interest for
which such Certificate is the Corresponding Certificate.
INTEREST SHORTFALL: With respect to any Distribution Date, means
the
aggregate shortfall, if any, in collections of interest
(adjusted to the related
Net Mortgage Rates) on Mortgage Loans resulting from (a)
Principal Prepayments
in full received during the related Prepayment Period,
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(b) the partial Principal Prepayments received during the
related Prepayment
Period to the extent applied prior to the Due Date in the month
of the
Distribution Date and (c) interest payments on certain of the
Mortgage Loans
being limited pursuant to the provisions of the Relief Act or
similar state
laws.
LAST SCHEDULED DISTRIBUTION DATE: February 25, 2035.
LATEST POSSIBLE MATURITY DATE: The Distribution Date following
the
final scheduled maturity date of the Mortgage Loan in the Trust
Fund having the
latest scheduled maturity date as of the Cut-off Date. For
purposes of the
Treasury Regulations under Code section 860A through 860G, the
latest possible
maturity date of each regular interest issued by REMIC I and
REMIC II shall be
the Latest Possible Maturity Date.
LIBOR BUSINESS DAY: Shall mean a day on which banks are open
for
dealing in foreign currency and exchange in London and New York
City.
LIQUIDATED LOAN: With respect to any Distribution Date, a
defaulted
Mortgage Loan that has been liquidated through deed-in-lieu of
foreclosure,
foreclosure sale, trustee's sale or other realization as
provided by applicable
law governing the real property subject to the related Mortgage
and any security
agreements and as to which the Company or the related Servicer
has made a Final
Recovery Determination with respect thereto.
LIQUIDATION PROCEEDS: Amounts, other than Insurance Proceeds,
received
in connection with the partial or complete liquidation of a
Mortgage Loan,
whether through trustee's sale, foreclosure sale or otherwise,
or in connection
with any condemnation or partial release of a Mortgaged Property
and any other
proceeds received with respect to an REO Property, less the sum
of related
unreimbursed Advances, Servicing Fees and Servicing Advances and
all expenses of
liquidation, including property protection expenses and
foreclosure and sale
costs, including court and reasonable attorneys fees.
LOAN-TO-VALUE RATIO: The fraction, expressed as a percentage,
the
numerator of which is the original principal balance of the
related Mortgage
Loan and the denominator of which is the Appraised Value of the
related
Mortgaged Property.
LOSS ALLOCATION LIMITATION: The meaning specified in Section
6.05(c)
hereof.
LPMI FEE: Shall mean the fee payable to the insurer for each
Mortgage
Loan subject to an LPMI Policy as set forth in such LPMI
Policy.
LPMI POLICY: A policy of mortgage guaranty insurance issued by
an
insurer meeting the requirements of Fannie Mae and Freddie Mac
in which the
Company or the related Servicer of the related Mortgage Loan is
responsible for
the payment of the LPMI Fee thereunder from collections on the
related Mortgage
Loan.
MAJORITY CLASS C CERTIFICATEHOLDER: Shall mean the Holder of a
50.01%
or greater Percentage Interest in the Class C Certificates.
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MARKER RATE: With respect to the Class C Certificate and any
Distribution Date, a per annum rate equal to two (2) times the
weighted average
of the Uncertificated REMIC I Pass-Through Rates for REMIC I
Regular Interest A,
REMIC I Regular Interest M-1, REMIC I Regular Interest M-2,
REMIC I Regular
Interest M-3, REMIC I Regular Interest B-1, REMIC I Regular
Interest B-2, REMIC
I Regular Interest B-3 and REMIC I Regular Interest ZZ, with the
rate on such
REMIC I Regular Interests (other than REMIC I Regular Interest
ZZ) subject to a
cap equal to the Pass-Through Rate for the Corresponding
Certificate and with
the rate on REMIC I Regular Interest ZZ subject to a cap of zero
for the purpose
of this calculation; provided, however, that for this purpose,
the calculation
of the Uncertificated REMIC I Pass-Through Rate and the related
cap with respect
to REMIC I Regular Interest M-1, REMIC I Regular Interest M-2,
REMIC I Regular
Interest M-3, REMIC I Regular Interest B-1, REMIC I Regular
Interest B-2 and
REMIC I Regular Interest B-3 shall be multiplied by a fraction,
the numerator of
which is the actual number of days in the Accrual Period and the
denominator of
which is 30.
MASTER SERVICER: Wells Fargo Bank, National Association, in
its
capacity as master servicer, and its successors and assigns.
MASTER SERVICER CERTIFICATION: A written certification
covering
servicing of the Mortgage Loans by the Company and all Servicers
and signed by
an officer of the Master Servicer that complies with (i) the
Sarbanes-Oxley Act
of 2002, as amended from time to time, and (ii) the February 21,
2003 Statement
by the Staff of the Division of Corporation Finance of the
Securities and
Exchange Commission Regarding Compliance by Asset-Backed Issuers
with Exchange
Act Rules 13a-14 and 15d-14, as in effect from time to time;
provided that if,
after the Closing Date (a) the Sarbanes-Oxley Act of 2002 is
amended, (b) the
Statement referred to in clause (ii) is modified or superceded
by any subsequent
statement, rule or regulation of the Securities and Exchange
Commission or any
statement of a division thereof, or (c) any future releases,
rules and
regulations are published by the Securities and Exchange
Commission from time to
time pursuant to the Sarbanes-Oxley Act of 2002, which in any
such case affects
the form or substance of the required certification and results
in the required
certification being, in the reasonable judgment of the Master
Servicer,
materially more onerous than the form of the required
certification as of the
Closing Date, the Master Servicer Certification shall be as
agreed to by the
Master Servicer, the Depositor and the Seller following a
negotiation in good
faith to determine how to comply with any such new
requirements.
MASTER SERVICER COLLECTION ACCOUNT: The trust accounts or
accounts
created and maintained pursuant to Section 5.06 hereof, which
shall be entitled
"U.S. Bank National Association, as Trustee f/b/o holders of
Bear Stearns Asset
Backed Securities I LLC, Asset Backed Certificates, Series
2005-AC1 - Master
Servicer Collection Account".
MASTER SERVICING COMPENSATION: For any Distribution Date, the
sum of
the Master Servicing Fee and the Additional Master Servicing
Compensation for
such Distribution Date.
MASTER SERVICING FEE: As to each Mortgage Loan and any
Distribution
Date, an amount equal to 1/12th of the Master Servicing Fee Rate
multiplied by
the Stated Principal Balance of such Mortgage Loan as of the
last day of the
related Due Period.
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MASTER SERVICING FEE RATE: 0.025% per annum.
MERS: Mortgage Electronic Registration Systems, Inc., a
corporation
organized and existing under the laws of the State of Delaware,
or any successor
thereto.
MERS(R) SYSTEM: The system of recording transfers of
Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered
with MERS on the MERS(R) System.
MOM LOAN: With respect to any Mortgage Loan, MERS acting as
the
mortgagee of such Mortgage Loan, solely as nominee for the
originator of such
Mortgage Loan and its successors and assigns, at the origination
thereof.
MONTHLY INTEREST DISTRIBUTABLE AMOUNT: With respect to the
Certificates
(other than the Class P Certificates and Class R Certificates)
for any
Distribution Date, means an amount equal to the interest accrued
during the
related Accrual Period at the applicable Pass-Through Rate on
the Certificate
Principal Balance (or Certificate Notional Amount) of such
Certificate
immediately prior to such Distribution Date less such
Certificate's share of any
Unpaid Interest Shortfall and the interest portion of any
Realized Losses on the
Mortgage Loans allocated to such Certificate pursuant to Section
1.02. The
Monthly Interest Distributable Amount with respect to the Class
A Certificates
and Class C Certificates is calculated on the basis of a 360-day
year consisting
of twelve 30-day months. The Monthly Interest Distributable
Amount with respect
to the Subordinate Certificates is calculated on the basis of a
360-day year and
the actual number of days elapsed during the related Accrual
Period. No Monthly
Interest Distributable Amount will be payable with respect to
any Class of
Certificates after the Distribution Date on which the
outstanding Certificate
Principal Balance (or Certificate Notional Amount) of such
Certificate has been
reduced to zero.
MONTHLY STATEMENT: The statement delivered to the
Certificateholders
pursuant to Section 6.06.
MOODY'S: Moody's Investors Service, Inc.
MORTGAGE: The mortgage, deed of trust or other instrument
creating a
first lien on or first priority ownership interest in an estate
in fee simple in
real property securing a Mortgage Note.
MORTGAGE FILE: The mortgage documents listed in Section 2.01
hereof
pertaining to a particular Mortgage Loan and any additional
documents delivered
to the Trustee to be added to the Mortgage File pursuant to this
Agreement.
MORTGAGE LOANS: Such of the Mortgage Loans transferred and
assigned to
the Trustee pursuant to the provisions hereof, as from time to
time are held as
a part of the Trust Fund (including any REO Property), the
mortgage loans so
held being identified in the Mortgage Loan Schedule,
notwithstanding foreclosure
or other acquisition of title of the related Mortgaged Property.
Any mortgage
loan that was intended by the parties hereto to be transferred
to the Trust
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Fund as indicated by such Mortgage Loan Schedule which is in
fact not so
transferred for any reason including, without limitation, a
breach of the
representation contained in Section 2.03(b)(v) hereof, shall
continue to be a
Mortgage Loan hereunder until the Purchase Price with respect
thereto has been
paid to the Trust Fund.
MORTGAGE LOAN PURCHASE AGREEMENT: Shall mean the Mortgage Loan
Purchase
Agreement, dated as of January 31, 2005, between the Seller, as
seller and the
Depositor, as purchaser.
MORTGAGE LOAN PURCHASE PRICE: The price, calculated as set forth
in
Section 11.01, to be paid in connection with the repurchase of
the Mortgage
Loans pursuant to Section 11.01.
MORTGAGE LOAN SCHEDULE: The list of Mortgage Loans (as from time
to
time amended by the Company or the Master Servicer to reflect
the deletion of
Deleted Mortgage Loans and the addition of Replacement Mortgage
Loans pursuant
to the provisions of this Agreement) transferred to the Trustee
as part of the
Trust Fund and from time to time subject to this Agreement, the
initial Mortgage
Loan Schedule being attached hereto as Exhibit B, setting forth
the following
information with respect to each Mortgage Loan:
(i) the loan number;
(ii) the Mortgage Rate in effect as of the Cut-off Date;
(iii) the Servicer (or the Company, if it services the
Mortgage Loan), the Servicing Fee Rate and the Master
Servicing Fee Rate;
(iv) the LPMI Fee, if applicable;
(v) the Net Mortgage Rate in effect as of the Cut-off
Date;
(vi) the maturity date;
(vii) the original principal balance;
(viii) the Cut-off Date Principal Balance;
(ix) the original term;
(x) the remaining term;
(xi) the property type; and
(xii) the MIN with respect to each Mortgage Loan.
Such schedule shall also set forth the aggregate Cut-off Date
Principal Balance
for all of the Mortgage Loans.
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MORTGAGE NOTE: The original executed note or other evidence
of
indebtedness of a Mortgagor under a Mortgage Loan.
MORTGAGE RATE: The annual rate of interest borne by a Mortgage
Note.
MORTGAGED PROPERTY: The underlying property securing a Mortgage
Loan.
MORTGAGOR: The obligors on a Mortgage Note.
NET INTEREST SHORTFALLS: Shall mean Interest Shortfalls net of
payments
by the Company, the Servicer or the Master Servicer in respect
of Compensating
Interest.
NET MONTHLY EXCESS CASHFLOW: With respect to any Distribution
Date, the
sum of (a) any Overcollateralization Release Amount for such
Distribution Date
and (b) the Remaining Excess Spread for such Distribution
Date.
NET MORTGAGE RATE: As to each Mortgage Loan, and at any time,
the per
annum rate equal to the related Mortgage Rate less the sum of
(i) the Servicing
Fee Rate, (ii) the Master Servicing Fee Rate and (iii) the rate
at which the
LPMI Fee is calculated, if any.
NET WAC RATE CARRYOVER AMOUNT: With respect any Class of
Offered
Certificates and any Distribution Date on which the related
Pass-Through Rate is
reduced by the related Interest Rate Cap, an amount equal to the
sum of (i) the
excess of (x) the amount of interest such Class would have been
entitled to
receive on such Distribution Date if the Pass-Through Rate
applicable to such
Class would not have been reduced by the related Interest Rate
Cap on such
Distribution Date over (y) the amount of interest paid to such
Class on such
Distribution Date plus (ii) the related Net WAC Rate Carryover
Amount for the
previous Distribution Date not previously distributed to such
Class together
with interest thereon at a rate equal to the Pass-Through Rate
for such Class
for the most recently ended Accrual Period.
NET WAC RESERVE FUND: Shall mean the separate trust account
created and
maintained by the Trustee pursuant to Section 6.08 hereof.
NON-BOOK-ENTRY CERTIFICATE: Any Certificate other than a
Book-Entry
Certificate.
NONRECOVERABLE ADVANCE: Any portion of an Advance previously
made or
proposed to be made by the Company or the Master Servicer
pursuant to this
Agreement or the related Servicer pursuant to the related
Servicing Agreement,
that, in the good faith judgment of the Company, the Master
Servicer or the
related Servicer, will not or, in the case of a proposed
advance, would not, be
ultimately recoverable by it from the related Mortgagor, related
Liquidation
Proceeds, Insurance Proceeds or otherwise.
OFFERED CERTIFICATES: Any of the Class A, Class M-1, Class M-2,
Class
M-3, Class B-1, Class B-2 and Class B-3 Certificates.
OFFICER'S CERTIFICATE: A certificate (i) signed by the Chairman
of the
Board, the Vice Chairman of the Board, the President, a Vice
President (however
denominated), an Assistant Vice President, the Treasurer, the
Secretary, or one
of the assistant treasurers or assistant
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secretaries of the Depositor or the Master Servicer (or any
other officer
customarily performing functions similar to those performed by
any of the above
designated officers and also to whom, with respect to a
particular matter, such
matter is referred because of such officer's knowledge of and
familiarity with a
particular subject) or (ii), if provided for in this Agreement,
signed by a
Servicing Officer, as the case may be, and delivered to the
Depositor, the
Seller, the Securities Administrator, the Master Servicer and/or
the Trustee, as
the case may be, as required by this Agreement.
ONE-MONTH LIBOR: With respect to any Accrual Period, the
rate
determined by the Securities Administrator on the related
Interest Determination
Date on the basis of the rate for U.S. dollar deposits for one
month that
appears on Telerate Screen Page 3750 as of 11:00 a.m. (London
time) on such
Interest Determination Date; provided that the parties hereto
acknowledge that
One-Month LIBOR for the first Accrual Period shall equal 2.55%
per annum. If
such rate does not appear on such page (or such other page as
may replace that
page on that service, or if such service is no longer offered,
such other
service for displaying One-Month LIBOR or comparable rates as
may be reasonably
selected by the Securities Administrator), One-Month LIBOR for
the applicable
Accrual Period will be the Reference Bank Rate. If no such
quotations can be
obtained by the Securities Administrator and no Reference Bank
Rate is
available, One-Month LIBOR will be One-Month LIBOR applicable to
the preceding
Accrual Period. The establishment of One-Month LIBOR on each
Interest
Determination Date by the Securities Administrator and the
Securities
Administrator's calculation of the rate of interest applicable
to the Class M-1,
Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3
Certificates for the
related Accrual Period shall, in the absence of manifest error,
be final and
binding.
OPINION OF COUNSEL: A written opinion of counsel, who may be
counsel
for the Seller, the Depositor, the Company or the Master
Servicer, reasonably
acceptable to each addressee of such opinion; provided that with
respect to
Section 2.05, 8.05, 8.07 or 12.01, or the interpretation or
application of the
REMIC Provisions, such counsel must (i) in fact be independent
of the Seller,
Depositor, the Company and the Master Servicer, (ii) not have
any direct
financial interest in the Seller, Depositor, the Company or the
Master Servicer
or in any affiliate of either, and (iii) not be connected with
the Seller,
Depositor, the Company or the Master Servicer as an officer,
employee, promoter,
underwriter, trustee, partner, director or person performing
similar functions.
OPTIONAL TERMINATION: The termination of the Trust Fund
created
hereunder as a result of the purchase of all of the Mortgage
Loans and any REO
Property pursuant to the last sentence of Section 11.01
hereof.
OPTIONAL TERMINATION DATE: The first Distribution Date on which
the
Trust Fund may be terminated at the option of the Majority Class
C
Certificateholder as described under Section 11.01.
ORIGINAL VALUE: The value of the property underlying a Mortgage
Loan
based, in the case of the purchase of the underlying Mortgaged
Property, on the
lower of an appraisal or the sales price of such property or, in
the case of a
refinancing, on an appraisal.
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ORIGINATOR: With respect to each Mortgage Loan, shall mean
the
originator set forth in the Mortgage Loan Schedule for such
Mortgage Loan.
OTS: The Office of Thrift Supervision.
OUTSTANDING: With respect to the Certificates as of any date
of
determination, all Certificates theretofore executed and
authenticated under
this Agreement except:
(a) Certificates theretofore canceled by the Trustee or
delivered to the Trustee for cancellation; and
(b) Certificates in exchange for which or in lieu of
which other Certificates have been executed and delivered by the
Trustee
pursuant to this Agreement.
OUTSTANDING MORTGAGE LOAN: As of any date of determination, a
Mortgage
Loan with a Stated Principal Balance greater than zero that was
not the subject
of a Principal Prepayment in full, and that did not become a
Liquidated Loan,
prior to the end of the related Prepayment Period.
OVERCOLLATERALIZATION INCREASE AMOUNT: As of any Distribution
Date, the
lesser of (a) the excess, if any, of (i) the
Overcollateralization Target Amount
over (ii) the Overcollateralized Amount on such Distribution
Date (after taking
into account payments to the Offered Certificates of the Basic
Principal
Distribution Amount on such Distribution Date) and (b) the
Excess Spread for
such Distribution Date.
OVERCOLLATERALIZATION RELEASE AMOUNT: With respect to any
Distribution
Date, the lesser of (x) the Principal Remittance Amount for such
Distribution
Date and (y) the excess, if any, of (i) the Overcollateralized
Amount for such
Distribution Date (assuming that 100% of the Principal
Remittance Amount is
applied as a principal payment on such Distribution Date) over
(ii) the
Overcollateralization Target Amount for such Distribution Date
(with the amount
pursuant to clause (y) deemed to be $0 if the Overcollateralized
Amount is less
than or equal to the Overcollateralization Target Amount on that
Distribution
Date.)
OVERCOLLATERALIZATION TARGET AMOUNT: With respect to any
Distribution
Date, $1,936,908.57.
OVERCOLLATERALIZED AMOUNT: With respect to any Distribution
Date, is
the excess, if any, of (a) the aggregate Stated Principal
Balance of the
Mortgage Loans as of the last day of the related Due Period over
(b) the
aggregate Certificate Principal Balance of the Offered
Certificates on such
Distribution Date (after taking into account the payment of
principal other than
any Extra Principal Distribution Amount on such
Certificates).
OWNERSHIP INTEREST: As to any Certificate, any ownership
interest in
such Certificate including any interest in such Certificate as
the Holder
thereof and any other interest therein, whether direct or
indirect, legal or
beneficial.
PASS-THROUGH RATE: With respect to each Class of Certificates
(other
than the Class C Certificates), the Class A Pass-Through Rate,
Class M-1
Pass-Through Rate, Class M-2 Pass-Through Rate, Class M-3
Pass-Through Rate,
Class B-1 Pass-Through Rate, Class B-2 Pass-Through Rate or
Class B-3
Pass-Through Rate, as applicable.
With respect to the Class C Certificates, a per annum rate equal
to the
percentage equivalent of a fraction, the numerator of which is
(x) the sum of
the amounts calculated pursuant to clauses (A) through (H)
below, and the
denominator of which is (y) the aggregate of the Uncertificated
Principal
Balances of the REMIC I Regular Interests
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<PAGE>
(other than REMIC I Regular Interest P). For purposes of
calculating the
Pass-Through Rate for the Class C Certificates, the numerator is
equal to the
sum of the following components:
(A) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest AA minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest AA;
(B) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest A minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest A;
(C) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest M-1 minus the Marker Rate, applied to
an
amount equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest M-1;
(D) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest M-2 minus the Marker Rate, applied to
an
amount equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest M-2;
(E) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest M-3 minus the Marker Rate, applied to
an
amount equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest M-3;
(F) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest B-1 minus the Marker Rate, applied to
an
amount equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest B-1;
(G) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest B-2 minus the Marker Rate, applied to
an
amount equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest B-2; and
(H) the Uncertificated REMIC I Pass-Through Rate for
REMIC I Regular Interest ZZ minus the Marker Rate, applied to an
amount
equal to the Uncertificated Principal Balance of REMIC I
Regular
Interest ZZ.
PERCENTAGE INTEREST: With respect to any Certificate of a
specified
Class, the Percentage Interest set forth on the face thereof or
the percentage
obtained by dividing the Denomination of such Certificate by the
aggregate of
the Denominations of all Certificates of the such Class.
PERMITTED INVESTMENTS: At any time, any one or more of the
following
obligations and securities:
(i) obligations of the United States or any agency
thereof, provided such obligations are backed by the full faith
and
credit of the United States;
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(ii) general obligations of or obligations guaranteed by
any state of the United States or the District of Columbia
receiving
the highest long-term debt rating of each Rating Agency, or such
lower
rating as will not result in the downgrading or withdrawal of
the
ratings then assigned to the Certificates by each Rating
Agency;
(iii) commercial or finance company paper which is then
receiving the highest commercial or finance company paper rating
of
each Rating Agency, or such lower rating as will not result in
the
downgrading or withdrawal of the ratings then assigned to
the
Certificates by each Rating Agency;
(iv) certificates of deposit, demand or time deposits, or
bankers' acceptances issued by any depository institution or
trust
company incorporated under the laws of the United States or of
any
state thereof and subject to supervision and examination by
federal
and/or state banking authorities (including the Trustee in
its
commercial banking capacity), provided that the commercial paper
and/or
long term unsecured debt obligations of such depository
institution or
trust company are then rated one of the two highest long-term
and the
highest short-term ratings of each such Rating Agency for
such
securities, or such lower ratings as will not result in the
downgrading
or withdrawal of the rating then assigned to the Certificates by
any
Rating Agency;
(v) demand or time deposits or certificates of deposit
issued by any bank or trust company or savings institution to
the
extent that such deposits are fully insured by the FDIC;
(vi) guaranteed reinvestment agreements issued by any
bank, insurance company or other corporation containing, at the
time of
the issuance of such agreements, such terms and conditions as
will not
result in the downgrading or withdrawal of the rating then
assigned to
the Certificates by any such Rating Agency;
(vii) repurchase obligations with respect to any security
described in clauses (i) and (ii) above, in either case entered
into
with a depository institution or trust company (acting as
principal)
described in clause (iv) above;
(viii) securities (other than stripped bonds, stripped
coupons or instruments sold at a purchase price in excess of
115% of
the face amount thereof) bearing interest or sold at a discount
issued
by any corporation incorporated under the laws of the United
States or
any state thereof which, at the time of such investment, have
one of
the two highest long term ratings of each Rating Agency (except
if the
Rating Agency is Moody's, such rating shall be the highest
commercial
paper rating of Moody's for any such securities), or such lower
rating
as will not result in the downgrading or withdrawal of the
rating then
assigned to the Certificates by any Rating Agency, as evidenced
by a
signed writing delivered by each Rating Agency;
(ix) interests in any money market fund (including any
such fund managed or advised by the Trustee or Master Servicer
or any
affiliate thereof) which at the date of acquisition of the
interests in
such fund and throughout the time such interests are held in
such fund
has the highest applicable long term rating by each Rating
Agency or
such
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<PAGE>
lower rating as will not result in the downgrading or withdrawal
of the
ratings then assigned to the Certificates by each Rating
Agency;
(x) short term investment funds sponsored by any trust
company or banking association incorporated under the laws of
the
United States or any state thereof (including any such fund
managed or
advised by the Trustee or any affiliate thereof) which on the
date of
acquisition has been rated by each Rating Agency in their
respective
highest applicable rating category or such lower rating as will
not
result in the downgrading or withdrawal of the ratings then
assigned to
the Certificates by each Rating Agency; and
(xi) such other investments having a specified stated
maturity and bearing interest or sold at a discount acceptable
to each
Rating Agency as will not result in the downgrading or
withdrawal of
the rating then assigned to the Certificates by any Rating
Agency, as
evidenced by a signed writing delivered by each Rating
Agency;
provided, that no such instrument shall be a Permitted
Investment if such
instrument (i) evidences the right to receive interest only
payments with
respect to the obligations underlying such instrument, (ii) is
purchased at a
premium or (iii) is purchased at a deep discount; provided
further that no such
instrument shall be a Permitted Investment (A) if such
instrument evidences
principal and interest payments derived from obligations
underlying such
instrument and the interest payments with respect to such
instrument provide a
yield to maturity of greater than 120% of the yield to maturity
at par of such
underlying obligations, or (B) if it may be redeemed at a price
below the
purchase price (the foregoing clause (B) not to apply to
investments in units of
money market funds pursuant to clause (vi) above); provided
further that no
amount beneficially owned by any REMIC may be invested in
investments (other
than money market funds) treated as equity interests for federal
income tax
purposes, unless the Master Servicer shall receive an Opinion of
Counsel, at the
expense of the Master Servicer, to the effect that such
investment will not
adversely affect the status of any such REMIC as a REMIC under
the Code or
result in imposition of a tax on any such REMIC. Permitted
Investments that are
subject to prepayment or call may not be purchased at a price in
excess of par.
PERMITTED TRANSFEREE: Any person other than (i) the United
States, any
State or political subdivision thereof, any possession of the
United States or
any agency or instrumentality of any of the foregoing, (ii) a
foreign
government, International Organization or any agency or
instrumentality of
either of the foregoing, (iii) an organization (except certain
farmers'
cooperatives described in section 521 of the Code) that is
exempt from tax
imposed by Chapter 1 of the Code (including the tax imposed by
section 511 of
the Code on unrelated business taxable income) on any excess
inclusions (as
defined in section 860E(c)(1) of the Code) with respect to any
Residual
Certificate, (iv) rural electric and telephone cooperatives
described in section
1381(a)(2)(C) of the Code, (v) a Person that is not a citizen or
resident of the
United States, a corporation, partnership (other than a
partnership that has any
direct or indirect foreign partners) or other entity (treated as
a corporation
or a partnership for federal income tax purposes), created or
organized in or
under the laws of the United States, any state thereof or the
District of
Columbia, an estate whose income from sources without the United
States is
includible in gross income for United States federal income tax
purposes
regardless of its connection with the
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<PAGE>
conduct of a trade or business within the United States, or a
trust if a court
within the United States is able to exercise primary supervision
over the
administration of the trust and one or more United States
persons have authority
to control all substantial decisions of the trustor and (vi) any
other Person so
designated by the Trustee based upon an Opinion of Counsel
addressed to the
Trustee (which shall not be an expense of the Trustee) that
states that the
Transfer of an Ownership Interest in a Residual Certificate to
such Person may
cause REMIC I or REMIC II to fail to qualify as a REMIC at any
time that any
Certificates are Outstanding. The terms "United States," "State"
and
"International Organization" shall have the meanings set forth
in section 7701
of the Code or successor provisions. A corporation will not be
treated as an
instrumentality of the United States or of any State or
political subdivision
thereof for these purposes if all of its activities are subject
to tax and, with
the exception of Freddie Mac, a majority of its board of
directors is not
selected by such government unit.
PERSON: Any individual, corporation, partnership, joint
venture,
association, joint- stock company, limited liability company,
trust,
unincorporated organization or government, or any agency or
political
subdivision thereof.
PREPAYMENT ASSUMPTION: The applicable rate of prepayment, as
described
in the Prospectus Supplement relating to each Class of Offered
Certificates.
PREPAYMENT CHARGE: Any prepayment premium, penalty or charge
payable by
a Mortgagor in connection with any Principal Prepayment on a
Mortgage Loan
pursuant to the terms of the related Mortgage Note.
PREPAYMENT INTEREST EXCESS: With respect to any Distribution
Date, for
each EMC Mortgage Loan that was the subject of a Principal
Prepayment in full or
in part during the portion of the related Prepayment Period
occurring between
the first day of the calendar month in which such Distribution
Date occurs and
the Determination Date of the calendar month in which such
Distribution Date
occurs, an amount equal to interest (to the extent received) at
the applicable
Net Mortgage Rate on the amount of such Principal Prepayment for
the number of
days commencing on the first day of the calendar month in which
such
Distribution Date occurs and ending on the last date through
which interest is
collected from the related Mortgagor.
PREPAYMENT INTEREST SHORTFALL: With respect to any Distribution
Date,
for each Mortgage Loan that was the subject of a partial
Principal Prepayment, a
Principal Prepayment in full, or that became a Liquidated Loan
during the
related Prepayment Period, (other than a Principal Prepayment in
full resulting
from the purchase of a Mortgage Loan pursuant to Section 2.02,
2.03, 4.20 or
11.01 hereof), the amount, if any, by which (i) one month's
interest at the
applicable Net Mortgage Rate on the Stated Principal Balance of
such Mortgage
Loan immediately prior to such prepayment (or liquidation) or in
the case of a
partial Principal Prepayment on the amount of such prepayment
(or liquidation
proceeds) exceeds (ii) the amount of interest paid or collected
in connection
with such Principal Prepayment or such liquidation proceeds less
the sum of (a)
the related Servicing Fee, (b) the Master Servicing Fee and (c)
the LPMI Fee, if
any.
PREPAYMENT PERIOD: As to any Distribution Date and (i) each
EMC
Mortgage Loan, the period commencing on the 16th day of the
month prior to the
month in which the related
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<PAGE>
Distribution Date occurs and ending on the 15th day of the month
in which such
Distribution Date occurs and (ii) any other Mortgage Loan, the
period set forth
in the related Servicing Agreement.
PRIMARY MORTGAGE INSURANCE POLICY: Any primary mortgage
guaranty
insurance policy issued in connection with a Mortgage Loan which
provides
compensation to a Mortgage Note holder in the event of default
by the obligor
under such Mortgage Note or the related security instrument, if
any or any
replacement policy therefor through the related Accrual Period
for such Class
relating to a Distribution Date.
PRINCIPAL DISTRIBUTION AMOUNT: With respect to each Distribution
Date,
the sum of (a) the Basic Principal Distribution Amount for such
Distribution
Date and (b) any Extra Principal Distribution Amount for such
Distribution Date.
PRINCIPAL FUNDS: With respect to any Distribution Date, (i) the
sum,
without duplication, of (a) all scheduled principal collected
during the related
Due Period, (b) all Advances relating to principal made on or
prior to the
Distribution Account Deposit Date, (c) Principal Prepayments
exclusive of
Prepayment Charges or penalties collected during the related
Prepayment Period,
(d) the Stated Principal Balance of each Mortgage Loan that was
repurchased by
the Seller pursuant to Sections 2.02 or 2.03 or by EMC pursuant
to Section 4.20,
(e) the aggregate of all Substitution Adjustment Amounts for the
related
Determination Date in connection with the substitution of
Mortgage Loans
pursuant to Section 2.03(c), (e) all Liquidation Proceeds and
Subsequent
Recoveries collected during the related Prepayment Period (to
the extent such
Liquidation Proceeds and Subsequent Recoveries relate to
principal) and remitted
by the Company or the related Servicer to the Distribution
Account pursuant to
this Agreement or the related Servicing Agreement and (f)
amounts in respect of
principal paid by the Majority Class C Certificateholder
pursuant to Section
11.01 minus (ii) all amounts required to be reimbursed pursuant
to Sections
5.02, 5.05, 5.07 and 5.09 or as otherwise set forth in this
Agreement.
PRINCIPAL REMITTANCE AMOUNT: With respect to each Distribution
Date,
the sum of the amounts listed in clauses (a) through (e) of the
definition of
Principal Funds.
PRINCIPAL PREPAYMENT: Any Mortgagor payment or other recovery of
(or
proceeds with respect to) principal on a Mortgage Loan
(including loans
purchased or repurchased under Sections 2.02, 2.03, 4.20 and
11.01 hereof) that
is received in advance of its scheduled Due Date and is not
accompanied by an
amount as to interest representing scheduled interest due on any
date or dates
in any month or months subsequent to the month of prepayment.
Partial Principal
Prepayments shall be applied by the Company or the related
Servicer, as
appropriate, in accordance with the terms of the related
Mortgage Note.
PRIVATE CERTIFICATES: Any of the Class P, Class C and
Residual
Certificates.
PROSPECTUS SUPPLEMENT: The Prospectus Supplement dated January
26, 2005
relating to the public offering of the Offered Certificates.
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PROTECTED ACCOUNT: Each account established and maintained by
the
Company with respect to receipts on the Mortgage Loans and REO
Property in
accordance with Section 5.01 hereof or by the related Servicer
in accordance
with the related Servicing Agreement.
PUD: A Planned Unit Development.
PURCHASE PRICE: With respect to any Mortgage Loan required to
be
repurchased by the Seller pursuant to Section 2.02 or 2.03
hereof, an amount
equal to the sum of (i) 100% of the outstanding principal
balance of the
Mortgage Loan as of the date of such purchase plus (ii) accrued
interest thereon
at the applicable Mortgage Rate through the first day of the
month in which the
Purchase Price is to be distributed to Certificateholders,
reduced by any
portion of the Servicing Fee, Servicing Advances and Advances
payable to the
purchaser of the Mortgage Loan plus and (iii) any costs and
damages (if any)
incurred by the Trust in connection with any violation of such
Mortgage Loan of
any predatory lending laws.
RATING AGENCY: Each of Moody's and S&P. If any such
organization or its
successor is no longer in existence, "Rating Agency" shall be a
nationally
recognized statistical rating organization, or other comparable
Person,
designated by the Depositor, notice of which designation shall
be given to the
Trustee. References herein to a given rating category of a
Rating Agency shall
mean such rating category without giving effect to any
modifiers.
REALIZED LOSS: With respect to each Mortgage Loan as to which a
Final
Recovery Determination has been made, an amount (not less than
zero) equal to
(i) the unpaid principal balance of such Mortgage Loan as of the
commencement of
the calendar month in which the Final Recovery Determination was
made, plus (ii)
accrued interest from the Due Date as to which interest was last
paid by the
Mortgagor through the end of the calendar month in which such
Final Recovery
Determination was made, calculated in the case of each calendar
month during
such period (A) at an annual rate equal to the annual rate at
which interest was
then accruing on such Mortgage Loan and (B) on a principal
amount equal to the
Stated Principal Balance of such Mortgage Loan as of the close
of business on
the Distribution Date during such calendar month, minus (v) the
proceeds, if
any, received in respect of such Mortgage Loan during the
calendar month in
which such Final Recovery Determination was made, net of amounts
that are
payable therefrom to the Company pursuant to this Agreement or
the applicable
Servicer pursuant to the related Servicing Agreement. In
addition, to the extent
the Master Servicer receives Subsequent Recoveries with respect
to any Mortgage
Loan, the amount of the Realized Loss with respect to that
Mortgage Loan will be
reduced to the extent such recoveries are distributed to any
Class of
Subordinate Certificates or applied to increase Excess Spread on
any
Distribution Date.
With respect to any REO Property as to which a Final
Recovery
Determination has been made, an amount (not less than zero)
equal to (i) the
unpaid principal balance of the related Mortgage Loan as of the
date of
acquisition of such REO Property on behalf of REMIC I, plus (ii)
accrued
interest from the Due Date as to which interest was last paid by
the Mortgagor
in respect of the related Mortgage Loan through the end of the
calendar month
immediately preceding the calendar month in which such REO
Property was
acquired, calculated in the case of each calendar month during
such period (A)
at an annual rate equal to the annual rate at which interest was
then accruing
on the related Mortgage Loan and (B) on a principal amount equal
to the Stated
Principal Balance of the related Mortgage Loan as of the close
of business on
the Distribution Date during such calendar month, plus (iii) REO
Imputed
Interest for such REO Property for each calendar month
commencing with the
calendar month in which such REO Property was acquired and
ending with the
calendar month in which such Final Recovery
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Determination was made, minus (iv) the aggregate of all
unreimbursed Advances
and Servicing Advances.
With respect to each Mortgage Loan which has become the subject
of a
Deficient Valuation, the difference between the principal
balance of the
Mortgage Loan outstanding immediately prior to such Deficient
Valuation and the
principal balance of the Mortgage Loan as reduced by the
Deficient Valuation.
With respect to each Mortgage Loan which has become the subject
of a
Debt Service Reduction, the portion, if any, of the reduction in
each affected
Monthly Payment attributable to a reduction in the Mortgage Rate
imposed by a
court of competent jurisdiction. Each such Realized Loss shall
be deemed to have
been incurred on the Due Date for each affected Monthly
Payment.
In addition, to the extent the Master Servicer receives
Subsequent
Recoveries with respect to any Mortgage Loan, the amount of the
Realized Loss
with respect to that Mortgage Loan will be reduced to the extent
such Subsequent
Recoveries are applied to reduce the Certificate Principal
Balance of any Class
of Certificates on any Distribution Date.
RECORD DATE: With respect to the Class A, Class C, Class P and
Class R
Certificates and any Distribution Date, the close of business on
the last
Business Day of the month preceding the month in which such
Distribution Date
occurs. With respect to any Distribution Date and the Class M-1,
Class M-2,
Class M-3, Class B-1, Class B-2 and Class B-3 Certificates, so
long as such
Certificates are Book-Entry Certificates, the Business Day
preceding such
Distribution Date, and otherwise, the close of business on the
last Business Day
of the month preceding the month in which such Distribution Date
occurs.
REFERENCE BANKS: Shall mean leading banks selected by the
Securities
Administrator and engaged in transactions in Eurodollar deposits
in the
international Eurocurrency market (i) with an established place
of business in
London, (ii) which have been designated as such by the
Securities Administrator
and (iii) which are not controlling, controlled by, or under
common control
with, the Depositor, the Seller or the Master Servicer.
REFERENCE BANK RATE: With respect to any Accrual Period shall
mean the
arithmetic mean, rounded upwards, if necessary, to the nearest
whole multiple of
0.03125%, of the offered rates for United States dollar deposits
for one month
that are quoted by the Reference Banks as of 11:00 a.m., New
York City time, on
the related Interest Determination Date to prime banks in the
London interbank
market for a period of one month in an amount approximately
equal to the
aggregate Certificate Principal Balance of the Class M-1, Class
M-2, Class M-3,
Class B-1, Class B-2 and Class B-3 Certificates for such Accrual
Period,
provided that at least two such Reference Banks provide such
rate. If fewer than
two offered rates appear, the Reference Bank Rate will be the
arithmetic mean,
rounded upwards, if necessary, to the nearest whole multiple of
0.03125%, of the
rates quoted by one or more major banks in New York City,
selected by the
Securities Administrator, as of 11:00 a.m., New York City time,
on such date for
loans in United States dollars to leading European banks for a
period of one
month in amounts approximately equal to the aggregate
Certificate Principal
Balance of the Class M-1, Class M-2, Class M-3, Class B-1, Class
B-2 and Class
B-3 Certificates for such Accrual Period.
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REGULAR CERTIFICATE: Any Certificate other than a Residual
Certificate.
RELIEF ACT: The Servicemembers Civil Relief Act, formerly known
as the
Soldiers' and Sailors' Civil Relief Act of 1940, as amended or
any similar state
law.
REMAINING EXCESS SPREAD: With respect to any Distribution Date
is the
Excess Spread less the any Extra Principal Distribution Amount,
in each case for
such Distribution Date.
REMIC: A "real estate mortgage investment conduit" within the
meaning
of section 860D of the Code.
REMIC I: The segregated pool of assets described in Section
6.07(a).
REMIC I INTEREST LOSS ALLOCATION AMOUNT: With respect to any
Distribution Date, an amount equal to (a) the product of (i) the
aggregate
Stated Principal Balance of the Mortgage Loans and REO
Properties then
outstanding and (ii) the Uncertificated REMIC I Pass-Through
Rate for REMIC I
Regular Interest AA minus the Marker Rate, divided by (b)
12.
REMIC I INTERESTS: The REMIC I Regular Interests and the Class
R-1
Certificates.
REMIC I OVERCOLLATERALIZATION AMOUNT: With respect to any date
of
determination, (i) 1% of the aggregate Uncertificated Principal
Balances of the
REMIC I Regular Interests minus (ii) the aggregate of the
Uncertificated
Principal Balances of REMIC I Regular Interest A, REMIC I
Regular Interest M-1,
REMIC I Regular Interest M-2, REMIC I Regular Interest M-3,
REMIC I Regular
Interest B-1, REMIC I Regular Interest B-2 and REMIC I Regular
Interest B-3, in
each case as of such date of determination.
REMIC I OVERCOLLATERALIZATION TARGET AMOUNT: 1% of the
Overcollateralization Target Amount.
REMIC I PRINCIPAL LOSS ALLOCATION AMOUNT: With respect to
any
Distribution Date, an amount equal to (a) the product of (i) the
aggregate
Stated Principal Balance of the Mortgage Loans and REO
Properties then
outstanding and (ii) 1 minus a fraction, the numerator of which
is two times the
aggregate of the Uncertificated Principal Balances of REMIC I
Regular Interest
A, REMIC I Regular Interest M-1, REMIC I Regular Interest M-2,
REMIC I Regular
Interest M-3, REMIC I Regular Interest B-1, REMIC I Regular
Interest B-2 and
REMIC I Regular Interest B-3 and the denominator of which is the
aggregate of
the Uncertificated Principal Balances of REMIC I Regular
Interest A, REMIC I
Regular Interest M-1, REMIC I Regular Interest M-2, REMIC I
Regular Interest
M-3, REMIC I Regular Interest B-1, REMIC I Regular Interest B-2,
REMIC I Regular
Interest B-3 and REMIC I Regular Interest ZZ.
REMIC I REGULAR INTEREST ZZ MAXIMUM INTEREST DEFERRAL AMOUNT:
With
respect to any Distribution Date, the excess of (i) accrued
interest at the
Uncertificated REMIC I Pass-Through Rate applicable to REMIC I
Regular Interest
ZZ for such Distribution Date on a balance equal to the
Uncertificated Principal
Balance of REMIC I Regular Interest ZZ minus the REMIC I
Overcollateralization
Amount, in each case for such Distribution Date, over (ii)
Uncertificated
Accrued Interest on REMIC I Regular Interest A, REMIC I Regular
Interest M-1,
REMIC I
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Regular Interest M-2, REMIC I Regular Interest M-3, REMIC I
Regular Interest
B-1, REMIC I Regular Interest B-2 and REMIC I Regular Interest
B-3 for such
Distribution Date, with the rate on each such REMIC I Regular
Interest subject
to a cap equal to the Pass-Through Rate for the Corresponding
Certificate.
REMIC I REGULAR INTERESTS: REMIC I Regular Interest AA, REMIC I
Regular
Interest A, REMIC I Regular Interest M-1, REMIC I Regular
Interest M-2, REMIC I
Regular Interest M-3, REMIC I Regular Interest B-1, REMIC I
Regular Interest
B-2, REMIC I Regular Interest B-3, REMIC I Regular Interest ZZ
and REMIC I
Regular Interest P.
REMIC I REGULAR INTEREST AA: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest AA shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST A: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest A shall
accrue interest at
the related Uncertificated REMIC I Pass-Through Rate in effect
from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST B-1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest B-1 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST B-2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest B-2 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST B-3: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest B-3 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST M-1: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC
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I Regular Interest M-1 shall accrue interest at the related
Uncertificated REMIC
I Pass-Through Rate in effect from time to time, and shall be
entitled to
distributions of principal, subject to the terms and conditions
hereof, in an
aggregate amount equal to its initial Uncertificated Principal
Balance as set
forth in the Preliminary Statement hereto.
REMIC I REGULAR INTEREST M-2: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-2 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST M-3: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest M-3 shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC I REGULAR INTEREST P: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest P will not
accrue interest
and shall be entitled to distributions of principal, subject to
the terms and
conditions hereof, in an aggregate amount equal to its initial
Uncertificated
Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC I REGULAR INTEREST ZZ: One of the separate
non-certificated
beneficial ownership interests in REMIC I issued hereunder and
designated as a
Regular Interest in REMIC I. REMIC I Regular Interest ZZ shall
accrue interest
at the related Uncertificated REMIC I Pass-Through Rate in
effect from time to
time, and shall be entitled to distributions of principal,
subject to the terms
and conditions hereof, in an aggregate amount equal to its
initial
Uncertificated Principal Balance as set forth in the Preliminary
Statement
hereto.
REMIC II: The segregated pool of assets described in the
Preliminary
Statement, consisting of the REMIC I Regular Interests.
REMIC II CERTIFICATES: The Regular Certificates and the Class
R-2
Certificates.
REMIC OPINION: Shall mean an Opinion of Counsel to the effect
that the
proposed action will not have an adverse affect on any REMIC
created hereunder.
REMIC PROVISIONS: Provisions of the federal income tax law
relating to
real estate mortgage investment conduits, which appear at
sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and
proposed, temporary and final regulations and published rulings,
notices and
announcements promulgated thereunder, as the foregoing may be in
effect from
time to time as well as provisions of applicable state laws.
REMIC REGULAR INTEREST: A REMIC I Regular Interest or
Regular
Certificate.
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REMITTANCE DATE: Shall mean (i) with respect to the Company,
the
Business Day immediately preceding the Distribution Account
Deposit Date and
(ii) with respect to the related Servicer, the date specified in
the related
Servicing Agreement.
REMITTANCE REPORT: As defined in Section 6.04(d).
REO IMPUTED INTEREST: As to any REO Property, for any calendar
month
during which such REO Property was at any time part of REMIC I,
one month's
interest at the applicable Net Mortgage Rate on the Stated
Principal Balance of
such REO Property (or, in the case of the first such calendar
month, of the
related Mortgage Loan, if appropriate) as of the close of
business on the
Distribution Date in such calendar month.
REO PROPERTY: A Mortgaged Property acquired by the Company or
the
related Servicer through foreclosure or deed-in-lieu of
foreclosure in
connection with a defaulted Mortgage Loan.
REPLACEMENT MORTGAGE LOAN: A Mortgage Loan or Mortgage Loans in
the
aggregate substituted by the Seller for a Deleted Mortgage Loan,
which must, on
the date of such substitution, as confirmed in a Request for
Release, (i) have a
Stated Principal Balance, after deduction of the principal
portion of the
Scheduled Payment due in the month of substitution, not in
excess of, and not
less than 90% of, the Stated Principal Balance of the Deleted
Mortgage Loan;
(ii) have a fixed Mortgage Rate not less than or more than 1%
per annum higher
than the Mortgage Rate of the Deleted Mortgage Loan; (iii) have
the same or
higher credit quality characteristics than that of the Deleted
Mortgage Loan;
(iv) have a Loan-to-Value Ratio no higher than that of the
Deleted Mortgage
Loan; (v) have a remaining term to maturity no greater than (and
not more than
one year less than) that of the Deleted Mortgage Loan; (vi) not
permit
conversion of the Mortgage Rate from a fixed rate to a variable
rate; (vii) have
the same lien priority as the Deleted Mortgage Loan; (viii)
constitute the same
occupancy type as the Deleted Mortgage Loan or be owner
occupied; and (ix)
comply with each representation and warranty set forth in
Section 2.03 hereof.
REPURCHASE PRICE: With respect to each Mortgage Loan, a price
equal to
(i) the outstanding principal balance of such Mortgage Loan,
plus (ii) interest
on such outstanding principal balance at the Mortgage Rate (net
of the Servicing
Fee Rate) from the last date through which interest has been
paid to the end of
the month of repurchase, less (iii) amounts advanced by the
Company or the
related Servicer in respect of such repurchased Mortgage Loan
which are being
held in the Master Servicer Collection Account for remittance to
the Trustee
plus (iv) any costs and damages (if any) incurred by the Trust
in connection
with any violation of such Mortgage Loan of any anti-predatory
lending laws.
REQUEST FOR RELEASE: The Request for Release to be submitted by
the
Seller, the Company, the related Servicer or the Master Servicer
to the
Custodian substantially in the form of Exhibit G. Each Request
for Release
furnished to the Custodian by the Seller, the Company, the
related Servicer or
the Master Servicer shall be in duplicate and shall be executed
by an officer of
such Person or a Servicing Officer (or, if furnished
electronically to the
Custodian, shall be deemed to have been sent and executed by an
officer of such
Person or a Servicing Officer) of the Company or the related
Servicer, as
applicable.
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REQUIRED INSURANCE POLICY: With respect to any Mortgage Loan,
any
insurance policy that is required to be maintained from time to
time under this
Agreement or the related Servicing Agreement.
RESIDUAL CERTIFICATES: Any of the Class R-1 Certificates and
Class R-2
Certificates, each evidencing the sole class of "residual
interests" (within the
meaning of Section 860G(a)(2) of the Code) in the related
REMIC.
RESPONSIBLE OFFICER: With respect to the Trustee, any Vice
President,
any Assistant Vice President, the Secretary, any Assistant
Secretary, or any
Trust Officer with specific responsibility for the transactions
contemplated
hereby, any other officer customarily performing functions
similar to those
performed by any of the above designated officers or other
officers of the
Trustee specified by the Trustee, as to whom, with respect to a
particular
matter, such matter is referred because of such officer's
knowledge of and
familiarity with the particular subject.
S&P: Standard & Poor's, a division of The McGraw-Hill
Companies, Inc.
SCHEDULED PAYMENT: The scheduled monthly payment on a Mortgage
Loan due
on any Due Date allocable to principal and/or interest on such
Mortgage Loan.
SECURITIES ACT: The Securities Act of 1933, as amended.
SECURITIES ADMINISTRATOR: Wells Fargo Bank, National
Association, in
its capacity as securities administrator hereunder, and its
successors and
assigns.
SELLER: EMC Mortgage Corporation, a Delaware corporation, and
its
successors and assigns, in its capacity as seller of the
Mortgage Loans to the
Depositor.
SENIOR CERTIFICATES: The Class A Certificates.
SERVICER: Shall mean any of GreenPoint, Cendant, HSBC or
SouthTrust.
SERVICING ADVANCES: All customary, reasonable and necessary "out
of
pocket" costs and expenses (including reasonable legal fees)
incurred in the
performance by the Company or the related Servicer of its
servicing obligations
hereunder or under the related Servicing Agreement, including,
but not limited
to, the cost of (i) the preservation, restoration and protection
of a Mortgaged
Property, (ii) any enforcement or judicial proceedings,
including foreclosures,
and including any expenses incurred in relation to any such
proceedings that
result from the Mortgage Loan being registered in the MERS(R)
System, (iii) the
management and liquidation of any REO Property (including,
without limitation,
realtor's commissions) and (iv) compliance with any obligations
under Section
3.07 hereof to cause insurance to be maintained.
SERVICING AGREEMENT: Shall mean either the GreenPoint
Servicing
Agreement, Cendant Servicing Agreement, HSBC Servicing Agreement
or SouthTrust
Servicing Agreement.
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SERVICING FEE: As to each Mortgage Loan and any Distribution
Date, an
amount equal to 1/12th of the Servicing Fee Rate multiplied by
the Stated
Principal Balance of such Mortgage Loan as of the last day of
the related Due
Period.
SERVICING FEE RATE: 0.250% per annum.
SERVICING MODIFICATION: With respect to any Mortgage Loan that
is in
default or, in the reasonable judgment of the Company or the
related Servicer,
as to which default is reasonably foreseeable, any modification
which is
effected by the Company or the related Servicer in accordance
with the terms of
this Agreement or the related Servicing Agreement which results
in any change in
the outstanding Stated Principal Balance, any change in the
Mortgage Rate or any
extension of the term of such Mortgage Loan.
SERVICING OFFICER: Any officer of the Company or the related
Servicer
involved in, or responsible for, the administration and
servicing of the
Mortgage Loans (i) in the case of the Company, whose name and
facsimile
signature appear on a list of servicing officers furnished to
the Trustee by the
Company on the Closing Date pursuant to this Agreement, as such
list may from
time to time be amended and (ii) in the case of the related
Servicer, as to
which evidence reasonably acceptable to the Trustee, as
applicable, of due
authorization, by such party has been furnished from time to
time to the
Trustee.
SOUTHTRUST: SouthTrust Mortgage Corporation, and any successor
thereto.
SOUTHTRUST ASSIGNMENT AGREEMENT: The Assignment, Assumption
and
Recognition Agreement, dated as of January 31, 2005, by and
among the Seller,
SouthTrust and the Trustee evidencing the assignment of the
SouthTrust Servicing
Agreement to the Trust.
SOUTHTRUST LOANS: Those Mortgage Loans subject to this Agreement
which
were purchased by the Seller from SouthTrust pursuant to the
SouthTrust
Servicing Agreement.
SOUTHTRUST SERVICING AGREEMENT: Shall mean the Purchase,
Warranties and
Servicing Agreement, dated as of November 1, 2002, by and
between the Seller and
SouthTrust, as modified by the SouthTrust Assignment
Agreement.
STARTUP DAY: The Startup Day for each REMIC formed hereunder
shall be
the Closing Date.
STATED PRINCIPAL BALANCE: With respect to any Mortgage Loan or
related
REO Property and any Distribution Date, the Cut-off Date
Principal Balance
thereof minus the sum of (i) the principal portion of the
Scheduled Payments due
with respect to such Mortgage Loan during each Due Period ending
prior to such
Distribution Date (and irrespective of any delinquency in their
payment), (ii)
all Principal Prepayments with respect to such Mortgage Loan
received prior to
or during the related Prepayment Period, and all Liquidation
Proceeds to the
extent applied by the Company or the related Servicer as
recoveries of principal
in accordance with Section 3.09 or the related Servicing
Agreement with respect
to such Mortgage Loan, that were received by the Company or the
related Servicer
as of the close of business on the last day of the Prepayment
Period related to
such Distribution Date and (iii) any Realized Losses on such
Mortgage Loan
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incurred during the related Prepayment Period. The Stated
Principal Balance of a
Liquidated Loan equals zero.
SUBORDINATE CERTIFICATES: Any of the Class M-1, Class M-2, Class
M-3,
Class B-1, Class B-2 and Class B-3 Certificates.
SUBSEQUENT RECOVERIES: As of any Distribution Date, amounts
received by
the Master Servicer during the related Due Period or surplus
amounts held by the
Master Servicer to cover estimated expenses (including, but not
limited to,
recoveries in respect of the representations and warranties made
by the Seller
pursuant to the Mortgage Loan Purchase Agreement) specifically
related to a
Liquidated Mortgage Loan or disposition of an REO Property prior
to the related
Prepayment Period that resulted in a Realized Loss, after the
liquidation or
disposition of such Mortgage Loan.
SUBSERVICING AGREEMENT: Any agreement entered into between the
Company
and a subservicer with respect to the subservicing of any
Mortgage Loan
hereunder by such subservicer.
SUBSTITUTION ADJUSTMENT AMOUNT: The meaning ascribed to such
term
pursuant to Section 2.03(c).
SUCCESSOR MASTER SERVICER: The meaning ascribed to such term
pursuant
to Section 9.01.
TAX MATTERS PERSON: The person designated as "tax matters
person" in
the manner provided under Treasury regulation ss. 1.860F-4(d)
and temporary
Treasury regulation ss. 301.6231(a)(7)-1T. The holder of the
greatest Percentage
Interest in a Class of Residual Certificates shall be the Tax
Matters Person for
the related REMIC. The Securities Administrator, or any
successor thereto or
assignee thereof shall serve as tax administrator hereunder and
as agent for the
related Tax Matters Person.
TRANSFER AFFIDAVIT: As defined in Section 7.02(c).
TRANSFER: Any direct or indirect transfer or sale of any
Ownership
Interest in a Certificate.
TRUST FUND: The corpus of the trust created hereunder consisting
of (i)
the Mortgage Loans and all interest accruing and principal due
with respect
thereto after the Cut-off Date to the extent not applied in
computing the
Cut-off Date Principal Balance thereof; (ii) the Class P
Certificate Account,
the Net WAC Reserve Fund, the Distribution Account, the Master
Servicer
Collection Account maintained by the Master Servicer and the
Protected Accounts
maintained by the Company and the Servicers and all amounts
deposited therein
pursuant to the applicable provisions of this Agreement and the
Servicing
Agreements; (iii) property that secured a Mortgage Loan and has
been acquired by
foreclosure, deed in lieu of foreclosure or otherwise; (iv) the
mortgagee's
rights under the Insurance Policies with respect to the Mortgage
Loans; (v) the
Servicing Agreements and the Assignment Agreements; (vi) the
rights under the
Mortgage Loan Purchase Agreement, and (vii) all proceeds of the
foregoing,
including proceeds of conversion, voluntary or involuntary, of
any of the
foregoing into cash or other liquid property.
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The Net WAC Reserve Fund shall constitute an asset of the Trust
Fund but will
not be included in REMIC I or REMIC II.
TRUSTEE: U.S. Bank National Association, a national banking
association, not in its individual capacity, but solely in its
capacity as
trustee for the benefit of the Certificateholders under this
Agreement, and any
successor thereto, and any corporation or national banking
association resulting
from or surviving any consolidation or merger to which it or its
successors may
be a party and any successor trustee as may from time to time be
serving as
successor trustee hereunder.
20% CLEAN-UP CALL DATE: Shall mean the first Distribution Date
upon
which the aggregate Stated Principal Balance of the Mortgage
Loans as of the end
of the related Due Period is less than or equal to 20% of the
aggregate Cut-off
Date Principal Balance of the Mortgage Loans.
UNCERTIFICATED ACCRUED INTEREST: With respect to each REMIC I
Regular
Interest on each Distribution Date, an amount equal to one
month's interest at
the related Uncertificated REMIC I Pass-Through Rate on the
Uncertificated
Principal Balance of such REMIC I Regular Interest. In each
case, Uncertificated
Accrued Interest will be reduced by any Prepayment Interest
Shortfalls and
shortfalls resulting from application of the Relief Act
(allocated to such REMIC
I Regular Interests as set forth in Sections 1.02 and 6.07).
UNCERTIFICATED PRINCIPAL BALANCE: With respect to each REMIC I
Regular
Interest, the principal amount of such REMIC I Regular Interest
outstanding as
of any date of determination. As of the Closing Date, the
Uncertificated
Principal Balance of each REMIC I Regular Interest shall equal
the amount set
forth in the Preliminary Statement hereto as its initial
Uncertificated
Principal Balance. On each Distribution Date, the Uncertificated
Principal
Balance of each REMIC I Regular Interest shall be reduced by all
distributions
of principal made on such REMIC I Regular Interest on such
Distribution Date
pursuant to Sections 6.07 and, if and to the extent necessary
and appropriate,
shall be further reduced on such Distribution Date by Realized
Losses as
provided in Sections 6.07. The Uncertificated Principal Balance
of each REMIC I
Regular Interest shall never be less than zero.
UNCERTIFICATED REMIC I PASS-THROUGH RATE: With respect to any
REMIC I
Regular Interest other than REMIC I Regular Interest P and any
Distribution
Date, a per annum rate equal to the average of the Net Mortgage
Rates of the
Mortgage Loans as of the first day of the related Due Period,
weighted on the
basis of the Stated Principal Balances as of the first day of
the related Due
Period. With respect to REMIC I Regular Interest P and any
Distribution Date,
0.00%.
UNPAID INTEREST SHORTFALLS: Shall mean Interest Shortfalls net
of
payments by the Company, the related Servicer or the Master
Servicer in respect
of Compensating Interest.
VOTING RIGHTS: The portion of the voting rights of all the
Certificates
that is allocated to any Certificate for purposes of the voting
provisions
hereunder. Voting Rights shall be allocated (i) 95.00% to the
Certificates
(other than the Class C, Class P and the Residual Certificates),
(ii) 1% to the
Class P Certificates, (iii) 3% to the Class C Certificates and
(iv) 0.50% to
each Class of Residual Certificates, with the allocation among
the Certificates
other than the Class C, Class
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P and Residual Certificates to be in proportion to the
Certificate Principal
Balance of each Class relative to the Certificate Principal
Balance of all other
such Classes. Voting Rights will be allocated among the
Certificates of each
such Class in accordance with their respective Percentage
Interests.
Section 1.02 ALLOCATION OF CERTAIN INTEREST SHORTFALLS.
For purposes of calculating the amount of the Monthly
Interest
Distributable Amount for the Class A, Class M-1, Class M-2,
Class M-3, Class
B-1, Class B-2, Class B-3 and Class C Certificates for any
Distribution Date,
(1) the aggregate amount of any Unpaid Interest Shortfalls in
respect of the
Mortgage Loans for any Distribution Date shall be allocated
first, in reduction
of amounts otherwise distributable to the Class C Certificates
and Class R
Certificates, and thereafter, among the Offered Certificates in
proportion to
the amount of the Monthly Interest Distributable Amount that
would have been
allocated to such Certificates in the absence of such Unpaid
Interest Shortfalls
and (2) the interest portion of Realized Losses for the Mortgage
Loans will be
allocated first, to the Class C Certificates based on, and to
the extent of, one
month's interest at the then applicable Pass-Through Rate on the
Certificate
Notional Amount thereof, second to the Class B-3 Certificates,
third to the
Class B-2 Certificates, fourth to the Class B-1 Certificates,
fifth to the Class
M-3 Certificates, sixth to the Class M-2 Certificates, seventh
to the Class M-1
Certificates and following the Cross-Over Date to the Senior
Certificates.
For purposes of calculating the amount of Uncertificated
Accrued
Interest for the REMIC I Regular Interests for any Distribution
Date, the
aggregate amount of any Unpaid Interest Shortfalls incurred in
respect of the
Mortgage Loans for any Distribution Date shall be allocated
first, to
Uncertificated Accrued Interest payable to REMIC I Regular
Interest AA and REMIC
I Regular Interest ZZ up to an aggregate amount equal to the
REMIC I Interest
Loss Allocation Amount, 98% and 2%, respectively, and thereafter
among REMIC I
Regular Interest A, REMIC I Regular Interest M-1, REMIC I
Regular Interest M-2,
REMIC I Regular Interest M-3, REMIC I Regular Interest B-1,
REMIC I Regular
Interest B-2, REMIC I Regular Interest B-3 and REMIC I Regular
Interest ZZ, pro
rata, based on, and to the extent of, one month's interest at
the then
applicable respective Uncertificated REMIC I Pass-Through Rate
on the respective
Uncertificated Principal Balance of each such REMIC I Regular
Interest.
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ARTICLE II
CONVEYANCE OF TRUST FUND
REPRESENTATIONS AND WARRANTIES
Section 2.01 CONVEYANCE OF TRUST FUND.
Pursuant to the Mortgage Loan Purchase Agreement, the Seller
sold,
transferred, assigned, set over and otherwise conveyed to the
Depositor, without
recourse, all the right, title and interest of the Seller in and
to the assets
in the Trust Fund.
The Seller has entered into this Agreement in consideration for
the
purchase of the Mortgage Loans by the Depositor pursuant to the
Mortgage Loan
Purchase Agreement and has agreed to take the actions specified
herein.
The Depositor, concurrently with the execution and delivery
hereof,
hereby sells, transfers, assigns, sets over and otherwise
conveys to the Trustee
for the use and benefit of the Certificateholders, without
recourse, all the
right, title and interest of the Depositor in and to the Trust
Fund.
In connection with such sale, the Depositor has delivered to,
and
deposited with, the Trustee or the Custodian, as its agent, the
following
documents or instruments with respect to each Mortgage Loan so
assigned: (i) the
original Mortgage Note, including any riders thereto, endorsed
without recourse
(A) to the order of "U.S. Bank National Association, as Trustee
for
certificateholders of Bear Stearns Asset Backed Securities I
LLC, Asset Backed
Certificates, Series 2005-AC1," or (B) in the case of a loan
registered on the
MERS system, in blank, and in each case showing to the extent
available to the
Seller an unbroken chain of endorsements from the original payee
thereof to the
Person endorsing it to the Trustee, (ii) the original Mortgage
and, if the
related Mortgage Loan is a MOM Loan, noting the presence of the
MIN and language
indicating that such Mortgage Loan is a MOM Loan, which shall
have been recorded
(or if the original is not available, a copy), with evidence of
such recording
indicated thereon (or if clause (x) in the proviso below
applies, shall be in
recordable form), (iii) unless the Mortgage Loan is a MOM Loan,
the assignment
(either an original or a copy, which may be in the form of a
blanket assignment
if permitted in the jurisdiction in which the Mortgaged Property
is located) to
the Trustee of the Mortgage with respect to each Mortgage Loan
in the name of
"U.S. Bank National Association, as Trustee for
certificateholders of Bear
Stearns Asset Backed Securities I LLC, Asset Backed
Certificates, Series
2005-AC1," which shall have been recorded (or if clause (x) in
the proviso below
applies, shall be in recordable form) (iv) an original or a copy
of all
intervening assignments of the Mortgage, if any, to the extent
available to the
Seller, with evidence of recording thereon, (v) the original
policy of title
insurance or mortgagee's certificate of title insurance or
commitment or binder
for title insurance, if available, or a copy thereof, or, in the
event that such
original title insurance policy is unavailable, a photocopy
thereof, or in lieu
thereof, a current lien search on the related Mortgaged Property
and (vi)
originals or copies of all available assumption, modification or
substitution
agreements, if any; provided, however, that in lieu of the
foregoing, the Seller
may deliver the following documents, under the circumstances set
forth below:
(x) if any Mortgage, assignment thereof to the Trustee or
intervening
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assignments thereof have been delivered or are being delivered
to recording
offices for recording and have not been returned in time to
permit their
delivery as specified above, the Depositor may deliver a true
copy thereof with
a certification by the Seller or the title company issuing the
commitment for
title insurance, on the face of such copy, substantially as
follows: "Certified
to be a true and correct copy of the original, which has been
transmitted for
recording"; and (y) in lieu of the Mortgage Notes relating to
the Mortgage Loans
identified in the list set forth in Exhibit I, the Depositor may
deliver a lost
note affidavit and indemnity and a copy of the original note, if
available; and
provided, further, however, that in the case of Mortgage Loans
which have been
prepaid in full after the Cut-Off Date and prior to the Closing
Date, the
Depositor, in lieu of delivering the above documents, may
deliver to the Trustee
and its Custodian a certification of a Servicing Officer to such
effect and in
such case shall deposit all amounts paid in respect of such
Mortgage Loans, in
the Master Servicer Collection Account or in the Distribution
Account on the
Closing Date. In the case of the documents referred to in clause
(x) above, the
Depositor shall deliver such documents to the Trustee or its
Custodian promptly
after they are received. The Seller shall cause, at its expense,
the Mortgage
and intervening assignments, if any, and to the extent required
in accordance
with the foregoing, the assignment of the Mortgage to the
Trustee to be
submitted for recording promptly after the Closing Date;
provided that the
Seller need not cause to be recorded any assignment (a) in any
jurisdiction
under the laws of which, as evidenced by an Opinion of Counsel
addressed to the
Trustee delivered by the Seller to the Trustee and the Rating
Agencies, the
recordation of such assignment is not necessary to protect the
Trustee's
interest in the related Mortgage Loan or (b) if MERS is
identified on the
Mortgage or on a properly recorded assignment of the Mortgage as
mortgagee of
record solely as nominee for Seller and its successors and
assigns. In the event
that the Seller, the Depositor or the Master Servicer gives
written notice to
the Trustee that a court has recharacterized the sale of the
Mortgage Loans as a
financing, the Seller shall submit or cause to be submitted for
recording as
specified above or, should the Seller fail to perform such
obligations, the
Master Servicer shall cause each such previously unrecorded
assignment to be
submitted for recording as specified above at the expense of the
Trust. In the
event a Mortgage File is released to the Company or the Servicer
as a result of
such Person having completed a Request for Release, the
Custodian shall, if not
so completed, complete the assignment of the related Mortgage in
the manner
specified in clause (iii) above.
In connection with the assignment of any Mortgage Loan
registered on
the MERS(R) System, the Seller further agrees that it will
cause, at the
Seller's own expense, within 30 days after the Closing Date, the
MERS(R) System
to indicate that such Mortgage Loans have been assigned by the
Seller to the
Depositor and by the Depositor to the Trustee in accordance with
this Agreement
for the benefit of the Certificateholders by including (or
deleting, in the case
of Mortgage Loans which are repurchased in accordance with this
Agreement) in
such computer files (a) the code in the field which identifies
the specific
Trustee and (b) the code in the field "Pool Field" which
identifies the series
of the Certificates issued in connection with such Mortgage
Loans. The Seller
further agrees that it will not, and will not permit the
Company, any Servicer
or the Master Servicer to, and the Master Servicer agrees that
it will not,
alter the codes referenced in this paragraph with respect to any
Mortgage Loan
during the term of this Agreement unless and until such Mortgage
Loan is
repurchased in accordance with the terms of this Agreement or
the Mortgage Loan
Purchase Agreement.
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<PAGE>
Section 2.02 ACCEPTANCE OF THE MORTGAGE LOANS.
(a) Based on the Initial Certification received by it
from the Custodian, the Trustee acknowledges receipt of, subject
to the further
review and exceptions reported by the Custodian pursuant to the
procedures
described below, the documents (or certified copies thereof)
delivered to the
Trustee or the Custodian on its behalf pursuant to Section 2.01
and declares
that it holds and will continue to hold directly or through a
custodian those
documents and any amendments, replacements or supplements
thereto and all other
assets of the Trust Fund delivered to it in trust for the use
and benefit of all
present and future Holders of the Certificates. On the Closing
Date, the Trustee
or the Custodian on its behalf will deliver an Initial
Certification confirming
whether or not it has received the Mortgage File for each
Mortgage Loan, but
without review of such Mortgage File, except to the extent
necessary to confirm
whether such Mortgage File contains the original Mortgage Note
or a lost note
affidavit and indemnity in lieu thereof. No later than 90 days
after the Closing
Date, the Trustee or the Custodian on its behalf shall, for the
benefit of the
Certificateholders, review each Mortgage File delivered to it
and execute and
deliver to the Seller and, if reviewed by the Custodian, the
Trustee, an Interim
Certification. In conducting such review, the Trustee or the
Custodian on its
behalf will ascertain whether all required documents have been
executed and
received and whether those documents relate, determined on the
basis of the
Mortgagor name, original principal balance and loan number, to
the Mortgage
Loans identified in Exhibit B to this Agreement, as supplemented
(provided,
however, that with respect to those documents described in
subclauses (iv) and
(vi) of Section 2.01, such obligations shall extend only to
documents actually
delivered pursuant to such subclauses). In performing any such
review, the
Trustee and the Custodian may conclusively rely on the purported
due execution
and genuineness of any such document and on the purported
genuineness of any
signature thereon. If the Trustee or the Custodian on its behalf
finds any
document constituting part of the Mortgage File not to have been
executed or
received, or to be unrelated to the Mortgage Loans identified in
Exhibit B or to
appear to be defective on its face, the Trustee or the Custodian
on its behalf
shall include such information in the exception report. The
Seller shall correct
or cure any such defect or, if prior to the end of the second
anniversary of the
Closing Date, the Seller may substitute for the related Mortgage
Loan a
Replacement Mortgage Loan, which substitution shall be
accomplished in the
manner and subject to the conditions set forth in Section 2.03
or shall deliver
to the Trustee an Opinion of Counsel addressed to the Trustee to
the effect that
such defect does not materially or adversely affect the
interests of the
Certificateholders in such Mortgage Loan within 60 days from the
date of notice
from the Trustee of the defect and if the Seller fails to
correct or cure the
defect or deliver such opinion within such period, the Seller
will, subject to
Section 2.03, within 90 days from the notification of the
Trustee purchase such
Mortgage Loan at the Purchase Price; provided, however, that if
such defect
relates solely to the inability of the Seller to deliver the
Mortgage,
assignment thereof to the Trustee, or intervening assignments
thereof with
evidence of recording thereon because such documents have been
submitted for
recording and have not been returned by the applicable
jurisdiction, the Seller
shall not be required to purchase such Mortgage Loan if the
Seller delivers such
documents promptly upon receipt, but in no event later than 360
days after the
Closing Date.
(b) No later than 180 days after the Closing Date, the
Trustee or the Custodian on its behalf will review, for the
benefit of the
Certificateholders, the Mortgage Files and will
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execute and deliver or cause to be executed and delivered to the
Seller and, if
reviewed by the Custodian, the Trustee, a Final Certification.
In conducting
such review, the Trustee or the Custodian on its behalf will
ascertain whether
each document required to be recorded has been returned from the
recording
office with evidence of recording thereon and the Trustee or the
Custodian on
its behalf has received either an original or a copy thereof, as
required in
Section 2.01 (provided, however, that with respect to those
documents described
in subclauses (iv) and (vi) of Section 2.01, such obligations
shall extend only
to documents actually delivered pursuant to such subclauses). If
the Trustee or
the Custodian on its behalf finds any document with respect to a
Mortgage Loan
has not been received, or to be unrelated, determined on the
basis of the
Mortgagor name, original principal balance and loan number, to
the Mortgage
Loans identified in Exhibit B or to appear defective on its
face, the Trustee or
the Custodian on its behalf shall note such defect in the
exception report
attached to the Final Certification and shall promptly notify
the Seller. The
Seller shall correct or cure any such defect or, if prior to the
end of the
second anniversary of the Closing Date, the Seller may
substitute for the
related Mortgage Loan a Replacement Mortgage Loan, which
substitution shall be
accomplished in the manner and subject to the conditions set
forth in Section
2.03 or shall deliver to the Trustee an Opinion of Counsel
addressed to the
Trustee to the effect that such defect does not materially or
adversely affect
the interests of Certificateholders in such Mortgage Loan within
60 days from
the date of notice from the Trustee of the defect and if the
Seller is unable
within such period to correct or cure such defect, or to
substitute the related
Mortgage Loan with a Replacement Mortgage Loan or to deliver
such opinion, the
Seller shall, subject to Section 2.03, within 90 days from the
notification of
the Trustee, purchase such Mortgage Loan at the Purchase Price;
provided,
however, that if such defect relates solely to the inability of
the Seller to
deliver the Mortgage, assignment thereof to the Trustee or
intervening
assignments thereof with evidence of recording thereon, because
such documents
have not been returned by the applicable jurisdiction, the
Seller shall not be
required to purchase such Mortgage Loan, if the Seller delivers
such documents
promptly upon receipt, but in no event later than 360 days after
the Closing
Date.
(c) In the event that a Mortgage Loan is purchased by the
Seller in accordance with subsections 2.02(a) or (b) above or
Section 2.03, the
Seller shall remit the applicable Purchase Price to the Master
Servicer for
deposit in the Master Servicer Collection Account and shall
provide written
notice to the Trustee detailing the components of the Purchase
Price, signed by
a Servicing Officer. Upon deposit of the Purchase Price in the
Master Servicer
Collection Account and upon receipt of a Request for Release
with respect to
such Mortgage Loan, the Trustee or the Custodian will release to
the Seller the
related Mortgage File and the Trustee shall execute and deliver
all instruments
of transfer or assignment, without recourse, representation or
warranty
furnished to it by the Seller, as are necessary to vest in the
Seller title to
and rights under the Mortgage Loan. Such purchase shall be
deemed to have
occurred on the date on which the deposit into the Master
Servicer Collection
Account was made. The Trustee shall promptly notify the Rating
Agencies of such
repurchase. The obligation of the Seller to cure, repurchase or
substitute for
any Mortgage Loan as to which a defect in a constituent document
exists shall be
the sole remedies respecting such defect available to the
Certificateholders or
to the Trustee on their behalf.
(d) The Seller shall deliver to the Trustee or the
Custodian on its behalf, and Trustee agrees to accept the
Mortgage Note and
other documents constituting the Mortgage File
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<PAGE>
with respect to any Replacement Mortgage Loan, which the Trustee
or the
Custodian will review as provided in subsections 2.02(a) and
2.02(b), provided,
that the Closing Date referred to therein shall instead be the
date of delivery
of the Mortgage File with respect to each Replacement Mortgage
Loan.
Section 2.03 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE
COMPANY,
THE MASTER SERVICER AND THE SELLER.
(a) The Company hereby represents and warrants to the
Master Servicer, the Depositor, the Securities Administrator and
the Trustee as
follows, as of the Closing Date:
(i) It is duly organized and is validly existing and in
good standing under the laws of the State of Delaware and is
duly
authorized and qualified to transact any and all business
contemplated
by this Agreement to be conducted by it in any state in which
a
Mortgaged Property related to an EMC Mortgage Loan is located or
is
otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the
doing
business laws of any such state, to the extent necessary to
ensure its
ability to enforce each EMC Mortgage Loan, to service the EMC
Mortgage
Loans in accordance with the terms of this Agreement and to
perform any
of its other obligations under this Agreement in accordance with
the
terms hereof.
(ii) It has the full corporate power and authority to
service each EMC Mortgage Loan, and to execute, deliver and
perform,
and to enter into and consummate the transactions contemplated
by this
Agreement and has duly authorized by all necessary corporate
action on
its part the execution, delivery and performance of this
Agreement; and
this Agreement, assuming the due authorization, execution and
delivery
hereof by the other parties hereto, constitutes its legal, valid
and
binding obligation, enforceable against it in accordance with
its
terms, except that (a) the enforceability hereof may be limited
by
bankruptcy, insolvency, moratorium, receivership and other
similar laws
relating to creditors' rights generally and (b) the remedy of
specific
performance and injunctive and other forms of equitable relief
may be
subject to equitable defenses and to the discretion of the court
before
which any proceeding therefor may be brought.
(iii) The execution and delivery of this Agreement by it,
the servicing of the EMC Mortgage Loans by it under this
Agreement, the
consummation of any other of the transactions contemplated by
this
Agreement, and the fulfillment of or compliance with the terms
hereof
are in its ordinary course of business and will not (A) result
in a
material breach of any term or provision of its charter or
by-laws or
(B) materially conflict with, result in a material breach,
violation or
acceleration of, or result in a material default under, the
terms of
any other material agreement or instrument to which it is a
party or by
which it may be bound, or (C) constitute a material violation of
any
statute, order or regulation applicable to it of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction
over it; and it is not in breach or violation of any material
indenture
or other material agreement or instrument, or in violation of
any
statute, order or regulation of any court, regulatory body,
administrative agency or
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<PAGE>
governmental body having jurisdiction over it which breach or
violation
may materially impair its ability to perform or meet any of
its
obligations under this Agreement.
(iv) It is an approved servicer of conventional mortgage
loans for Fannie Mae or Freddie Mac and is a mortgagee approved
by the
Secretary of Housing and Urban Development pursuant to sections
203 and
211 of the National Housing Act.
(v) No litigation is pending or, to the best of its
knowledge, threatened, against it that would materially and
adversely
affect the execution, delivery or enforceability of this
Agreement or
its ability to service the EMC Mortgage Loans or to perform any
of its
other obligations under this Agreement in accordance with the
terms
hereof.
(vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for its
execution,
delivery and performance of, or compliance with, this Agreement
or the
consummation of the transactions contemplated hereby, or if any
such
consent, approval, authorization or order is required, it has
obtained
the same.
(b) Wells Fargo Bank, National Association, in its
capacity as Master Servicer and Securities Administrator hereby
represents and
warrants to the Seller, the Depositor and the Trustee as
follows, as of the
Closing Date:
(i) It is a national banking association duly formed,
validly existing and in good standing under the laws of the
United
States of America and is duly authorized and qualified to
transact any
and all business contemplated by this Agreement to be conducted
by the
Master Servicer and the Securities Administrator in any state in
which
a Mortgaged Property is located or is otherwise not required
under
applicable law to effect such qualification and, in any event,
is in
compliance with the doing business laws of any such state, to
the
extent necessary to ensure its ability to enforce each Mortgage
Loan,
to service the Mortgage Loans in accordance with the terms of
this
Agreement and to perform any of its other obligations under
this
Agreement in accordance with the terms hereof;
(ii) It has the full corporate power and authority to
execute, deliver and perform, and to enter into and consummate
the
transactions contemplated by this Agreement and has duly
authorized by
all necessary corporate action on its part the execution,
delivery and
performance of this Agreement; and this Agreement, assuming the
due
authorization, execution and delivery hereof by the other
parties
hereto, constitutes its legal, valid and binding obligation,
enforceable against it in accordance with its terms, except that
(a)
the enforceability hereof may be limited by bankruptcy,
insolvency,
moratorium, receivership and other similar laws relating to
creditors'
rights generally and (b) the remedy of specific performance
and
injunctive and other forms of equitable relief may be subject
to
equitable defenses and to the discretion of the court before
which any
proceeding therefor may be brought.
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(iii) The execution and delivery of this Agreement by it,
the consummation of any other of the transactions contemplated
by this
Agreement, and the fulfillment of or compliance with the terms
hereof
are in its ordinary course of business and will not (A) result
in a
material breach of any term or provision of its charter or
by-laws or
(B) materially conflict with, result in a material breach,
violation or
acceleration of, or result in a material default under, the
terms of
any other material agreement or instrument to which it is a
party or by
which it may be bound, or (C) constitute a material violation of
any
statute, order or regulation applicable to it of any court,
regulatory
body, administrative agency or governmental body having
jurisdiction
over it; and it is not in breach or violation of any material
indenture
or other material agreement or instrument, or in violation of
any
statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction
over it
which breach or violation may materially impair its ability to
perform
or meet any of its obligations under this Agreement.
(iv) No litigation is pending or, to the best of its
knowledge, threatened, against it that would materially and
adversely
affect the execution, delivery or enforceability of this
Agreement or
its ability to perform any of its other obligations under
this
Agreement in accordance with the terms hereof.
(v) No consent, approval, authorization or order of any
court or governmental agency or body is required for its
execution,
delivery and performance of, or compliance with, this Agreement
or the
consummation of the transactions contemplated hereby, or if any
such
consent, approval, authorization or order is required, it has
obtained
the same.
(c) The Seller hereby represents and warrants to the
Depositor, the Securities Administrator, the Master Servicer and
the Trustee as
follows, as of the Closing Date:
(i) The Seller is duly organized as a Delaware
corporation and is validly existing and in good standing under
the laws
of the State of Delaware and is duly authorized and qualified
to
transact any and all business contemplated by this Agreement to
be
conducted by the Seller in any state in which a Mortgaged
Property is
located or is otherwise not required under applicable law to
effect
such qualification and, in any event, is in compliance with the
doing
business laws of any such state, to the extent necessary to
ensure its
ability to enforce each Mortgage Loan, to sell the Mortgage
Loans in
accordance with the terms of this Agreement and to perform any
of its
other obligations under this Agreement in accordance with the
terms
hereof.
(ii) The Seller has the full corporate power and authority
to sell each Mortgage Loan, and to execute, deliver and perform,
and to
enter into and consummate the transactions contemplated by
this
Agreement and has duly authorized by all necessary corporate
action on
the part of the Seller the execution, delivery and performance
of this
Agreement; and this Agreement, assuming the due
authorization,
execution and delivery hereof by the other parties hereto,
constitutes
a legal, valid and binding obligation of the Seller,
enforceable
against the Seller in accordance with its terms, except that (a)
the
enforceability hereof may be limited by bankruptcy,
insolvency,
moratorium,
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receivership and other similar laws relating to creditors'
rights
generally and (b) the remedy of specific performance and
injunctive and
other forms of equitable relief may be subject to equitable
defenses
and to the discretion of the court before which any proceeding
therefor
may be brought.
(iii) The execution and delivery of this Agreement by the
Seller, the sale of the Mortgage Loans by the Seller under the
Mortgage
Loan Purchase Agreement, the consummation of any other of
the
transactions contemplated by this Agreement, and the fulfillment
of or
compliance with the terms hereof and thereof are in the ordinary
course
of business of the Seller and will not (A) result in a material
breach
of any term or provision of the charter or by-laws of the Seller
or (B)
materially conflict with, result in a material breach, violation
or
acceleration of, or result in a material default under, the
terms of
any other material agreement or instrument to which the Seller
is a
party or by which it may be bound, or (C) constitute a
material
violation of any statute, order or regulation applicable to the
Seller
of any court, regulatory body, administrative agency or
governmental
body having jurisdiction over the Seller; and the Seller is not
in
breach or violation of any material indenture or other
material
agreement or instrument, or in violation of any statute, order
or
regulation of any court, regulatory body, administrative agency
or
governmental body having jurisdiction over it which breach or
violation
may materially impair the Seller's ability to perform or meet
any of
its obligations under this Agreement.
(iv) The Seller is an approved seller of conventional
mortgage loans for Fannie Mae or Freddie Mac and is a
mortgagee
approved by the Secretary of Housing and Urban Development
pursuant to
sections 203 and 211 of the National Housing Act.
(v) No litigation is pending or, to the best of the
Seller's knowledge, threatened, against the Seller that
would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Seller to
sell
the Mortgage Loans or to perform any of its other obligations
under
this Agreement in accordance with the terms hereof.
(vi) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution,
delivery and performance by the Seller of, or compliance by the
Seller
with, this Agreement or the consummation of the transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Seller has obtained the same.
(vii) As of the Closing Date, the representations and
warranties concerning the Mortgage Loans set forth in Section 7
of the
Mortgage Loan Purchase Agreement are true and correct in all
material
respects.
(d) Upon discovery by any of the parties hereto of a
breach of a representation or warranty set forth in Section 7 of
the Mortgage
Loan Purchase Agreement that materially and adversely affects
the interests of
the Certificateholders in any Mortgage Loan, the party
discovering such breach
shall give prompt written notice thereof to the other parties.
The Seller
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hereby covenants with respect to the representations and
warranties set forth in
Section 7 of the Mortgage Loan Purchase Agreement, that within
90 days of the
discovery of a breach of any representation or warranty set
forth therein that
materially and adversely affects the interests of the
Certificateholders in any
Mortgage Loan, it shall cure such breach in all material
respects and, if such
breach is not so cured, (i) if such 90-day period expires prior
to the second
anniversary of the Closing Date, remove such Mortgage Loan (a
"Deleted Mortgage
Loan") from the Trust Fund and substitute in its place a
Replacement Mortgage
Loan, in the manner and subject to the conditions set forth in
this Section; or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans
from the Trustee at
the Purchase Price in the manner set forth below; provided that
any such
substitution pursuant to (i) above or repurchase pursuant to
(ii) above shall
not be effected prior to the delivery to the Trustee of an
Opinion of Counsel if
required by Section 2.05 hereof and any such substitution
pursuant to (i) above
shall not be effected prior to the additional delivery to the
Trustee of a
Request for Release. The Seller shall promptly reimburse the
Master Servicer and
the Trustee for any expenses reasonably incurred by the Master
Servicer or the
Trustee in respect of enforcing the remedies for such breach. To
enable the
Securities Administrator to amend the Mortgage Loan Schedule,
the Seller shall,
unless it cures such breach in a timely fashion pursuant to this
Section 2.03,
promptly notify the Securities Administrator whether it intends
either to
repurchase, or to substitute for, the Mortgage Loan affected by
such breach.
With respect to the representations and warranties in Section 7
of the Mortgage
Loan Purchase Agreement that are made to the best of the
Seller's knowledge, if
it is discovered by any of the Depositor, the Master Servicer,
the Seller, the
Securities Administrator or the Trustee that the substance of
such
representation and warranty is inaccurate and such inaccuracy
materially and
adversely affects the value of the related Mortgage Loan,
notwithstanding the
Seller's lack of knowledge with respect to the substance of such
representation
or warranty, the Seller shall nevertheless be required to cure,
substitute for
or repurchase the affected Mortgage Loan in accordance with the
foregoing.
With respect to any Replacement Mortgage Loan or Loans, the
Seller
shall deliver to the Trustee for the benefit of the
Certificateholders such
documents and agreements as are required by Section 2.01. No
substitution will
be made in any calendar month after the Determination Date for
such month.
Scheduled Payments due with respect to Replacement Mortgage
Loans in the Due
Period related to the Distribution Date on which such proceeds
are to be
distributed shall not be part of the Trust Fund and will be
retained by the
Seller. For the month of substitution, distributions to
Certificateholders will
include the Scheduled Payment due on any Deleted Mortgage Loan
for the related
Due Period and thereafter the Seller shall be entitled to retain
all amounts
received in respect of such Deleted Mortgage Loan. The
Securities Administrator
shall amend the Mortgage Loan Schedule for the benefit of the
Certificateholders
to reflect the removal of such Deleted Mortgage Loan and the
substitution of the
Replacement Mortgage Loan or Loans and the Securities
Administrator shall
deliver the amended Mortgage Loan Schedule to the Trustee and
the Custodian.
Upon such substitution, the Replacement Mortgage Loan or Loans
shall be subject
to the terms of this Agreement in all respects, and the Seller
shall be deemed
to have made with respect to such Replacement Mortgage Loan or
Loans, as of the
date of substitution, the representations and warranties set
forth in Section 7
of the Mortgage Loan Purchase Agreement with respect to such
Mortgage Loan. Upon
any such substitution and the deposit into the Master Servicer
Collection
Account of the amount required to be deposited therein in
connection with such
substitution as described in the following paragraph and
receipt
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by the Trustee of a Request for Release for such Mortgage Loan,
the Trustee or
the Custodian shall release to the Seller the Mortgage File
relating to such
Deleted Mortgage Loan and held for the benefit of the
Certificateholders and the
Trustee shall execute and deliver at the Seller's direction such
instruments of
transfer or assignment as have been prepared by the Seller, in
each case without
recourse, representation or warranty as shall be necessary to
vest in the
Seller, or its respective designee, title to the Trustee's
interest in any
Deleted Mortgage Loan substituted for pursuant to this Section
2.03.
For any month in which the Seller substitutes one or more
Replacement
Mortgage Loans for a Deleted Mortgage Loan, the Master Servicer
will determine
the amount (if any) by which the aggregate principal balance of
all the
Replacement Mortgage Loans as of the date of substitution is
less than the
Stated Principal Balance (after application of the principal
portion of the
Scheduled Payment due in the month of substitution) of such
Deleted Mortgage
Loan. An amount equal to the aggregate of such deficiencies,
described in the
preceding sentence for any Distribution Date (such amount, the
"Substitution
Adjustment Amount") shall be deposited into the Master Servicer
Collection
Account, by the Seller delivering such Replacement Mortgage Loan
on the
Determination Date for the Distribution Date relating to the
Prepayment Period
during which the related Mortgage Loan became required to be
purchased or
replaced hereunder.
In the event that the Seller shall have repurchased a Mortgage
Loan,
the Purchase Price therefor shall be deposited into the Master
Servicer
Collection Account maintained by the Master Servicer, on the
Determination Date
for the Distribution Date in the month following the month
during which the
Seller became obligated to repurchase or replace such Mortgage
Loan and upon
such deposit of the Purchase Price, the delivery of an Opinion
of Counsel if
required by Section 2.05 and the receipt of a Request for
Release, the Trustee
or the Custodian shall release the related Mortgage File held
for the benefit of
the Certificateholders to the Seller, and the Trustee shall
execute and deliver
at such Person's direction the related instruments of transfer
or assignment
prepared by the Seller, in each case without recourse,
representation or
warranty as shall be necessary to transfer title from the
Trustee for the
benefit of the Certificateholders and transfer the Trustee's
interest to the
Seller to any Mortgage Loan purchased pursuant to this Section
2.03. It is
understood and agreed that the obligation under this Agreement
of the Seller to
cure, repurchase or replace any Mortgage Loan as to which a
breach has occurred
and is continuing shall constitute the sole remedies against the
Seller
respecting such breach available to Certificateholders, the
Depositor or the
Trustee.
(e) The representations and warranties set forth in
Section 2.03 hereof shall survive delivery of the respective
Mortgage Loans and
Mortgage Files to the Trustee or the Custodian for the benefit
of the
Certificateholders.
Section 2.04 REPRESENTATIONS AND WARRANTIES OF THE
DEPOSITOR.
The Depositor hereby represents and warrants to the Master
Servicer,
the Securities Administrator and the Trustee as follows, as of
the date hereof
and as of the Closing Date:
(i) The Depositor is duly organized and is validly
existing as limited liability company in good standing under the
laws
of the State of Delaware and has full power and
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authority necessary to own or hold its properties and to conduct
its
business as now conducted by it and to enter into and perform
its
obligations under this Agreement.
(ii) The Depositor has the full power and authority to
execute, deliver and perform, and to enter into and consummate
the
transactions contemplated by, this Agreement and has duly
authorized,
by all necessary action on its part, the execution, delivery
and
performance of this Agreement; and this Agreement, assuming the
due
authorization, execution and delivery hereof by the other
parties
hereto, constitutes a legal, valid and binding obligation of
the
Depositor, enforceable against the Depositor in accordance with
its
terms, subject, as to enforceability, to (i) bankruptcy,
insolvency,
reorganization, moratorium and other similar laws affecting
creditors'
rights generally and (ii) general principles of equity,
regardless of
whether enforcement is sought in a proceeding in equity or at
law.
(iii) The execution and delivery of this Agreement by the
Depositor, the consummation of the transactions contemplated by
this
Agreement, and the fulfillment of or compliance with the terms
hereof
are in the ordinary course of business of the Depositor and will
not
(A) result in a material breach of any term or provision of
the
organizational documents of the Depositor or (B) materially
conflict
with, result in a material breach, violation or acceleration of,
or
result in a material default under, the terms of any other
material
agreement or instrument to which the Depositor is a party or by
which
it may be bound or (C) constitute a material violation of any
statute,
order or regulation applicable to the Depositor of any
court,
regulatory body, administrative agency or governmental body
having
jurisdiction over the Depositor; and the Depositor is not in
breach or
violation of any material indenture or other material agreement
or
instrument, or in violation of any statute, order or regulation
of any
court, regulatory body, administrative agency or governmental
body
having jurisdiction over it which breach or violation may
materially
impair the Depositor's ability to perform or meet any of its
obligations under this Agreement.
(iv) No litigation is pending, or, to the best of the
Depositor's knowledge, threatened, against the Depositor that
would
materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of the Depositor
to
perform its obligations under this Agreement in accordance with
the
terms hereof.
(v) No consent, approval, authorization or order of any
court or governmental agency or body is required for the
execution,
delivery and performance by the Depositor of, or compliance by
the
Depositor with, this Agreement or the consummation of the
transactions
contemplated hereby, or if any such consent, approval,
authorization or
order is required, the Depositor has obtained the same.
The Depositor hereby represents and warrants to the Trustee as
of the
Closing Date, following the transfer of the Mortgage Loans to it
by the Seller,
the Depositor had good title to the Mortgage Loans and the
related Mortgage
Notes were subject to no offsets, claims, defenses or
counterclaims.
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It is understood and agreed that the representations and
warranties set
forth in the immediately preceding paragraph shall survive
delivery of the
Mortgage Files to the Trustee or the Custodian for the benefit
of the
Certificateholders. Upon discovery by the Depositor or the
Trustee of a breach
of such representations and warranties, the party discovering
such breach shall
give prompt written notice to the others and to each Rating
Agency.
Section 2.05 DELIVERY OF OPINION OF COUNSEL IN CONNECTION
WITH
SUBSTITUTIONS AND REPURCHASES.
(a) Notwithstanding any contrary provision of this
Agreement, with respect to any Mortgage Loan that is not in
default or as to
which default is not imminent, no repurchase or substitution
pursuant to
Sections 2.02 or 2.03 shall be made unless the Seller delivers
to the Trustee an
Opinion of Counsel, addressed to the Trustee, to the effect that
such repurchase
or substitution would not (i) result in the imposition of the
tax on "prohibited
transactions" of REMIC I or REMIC II or contributions after the
Closing Date, as
defined in sections 860F(a)(2) and 860G(d) of the Code,
respectively or (ii)
cause any of REMIC I or REMIC II to fail to qualify as a REMIC
at any time that
any Certificates are outstanding. Any Mortgage Loan as to which
repurchase or
substitution was delayed pursuant to this paragraph shall be
repurchased or the
substitution therefor shall occur (subject to compliance with
Sections 2.02 or
2.03) upon the earlier of (a) the occurrence of a default or
imminent default
with respect to such Mortgage Loan and (b) receipt by the
Trustee of an Opinion
of Counsel addressed to the Trustee to the effect that such
repurchase or
substitution, as applicable, will not result in the events
described in clause
(i) or clause (ii) of the preceding sentence.
(b) Upon discovery by the Depositor, the Seller or the
Master Servicer that any Mortgage Loan does not constitute a
"qualified
mortgage" within the meaning of section 860G(a)(3) of the Code,
the party
discovering such fact shall promptly (and in any event within 5
Business Days of
discovery) give written notice thereof to the other parties and
the Trustee. In
connection therewith, the Trustee shall require the Seller, at
the Seller's
option, to either (i) substitute, if the conditions in Section
2.03(c) with
respect to substitutions are satisfied, a Replacement Mortgage
Loan for the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage
Loan within 90
days of such discovery in the same manner as it would a Mortgage
Loan for a
breach of representation or warranty contained in Section 2.03.
The Trustee
shall reconvey to the Seller the Mortgage Loan to be released
pursuant hereto
(and the Custodian shall deliver the related Mortgage File) in
the same manner,
and on the same terms and conditions, as it would a Mortgage
Loan repurchased
for breach of a representation or warranty contained in Section
2.03.
Section 2.06 COUNTERSIGNATURE AND DELIVERY OF CERTIFICATES.
(a) The Trustee acknowledges the sale, transfer and
assignment to it of the Trust Fund and, concurrently with such
transfer and
assignment, has executed, countersigned and delivered, to or
upon the order of
the Depositor, the Certificates in authorized denominations
evidencing the
entire ownership of the Trust Fund. The Trustee agrees to hold
the Trust Fund
and exercise the rights referred to above for the benefit of all
present and
future Holders of the Certificates and to perform the duties set
forth in this
Agreement in accordance with its terms.
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(b) The Depositor, concurrently with the execution and
delivery hereof, does hereby transfer, assign, set over and
otherwise convey in
trust to the Trustee without recourse all the right, title and
interest of the
Depositor in and to the REMIC I Regular Interests, and the other
assets of REMIC
II for the benefit of the holders of the REMIC II Certificates.
The Trustee
acknowledges receipt of the REMIC I Regular Interests (which are
uncertificated)
and the other assets of REMIC II and declares that it holds and
will hold the
same in trust for the exclusive use and benefit of the holders
of the REMIC II
Certificates.
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ARTICLE III
ADMINISTRATION AND SERVICING OF EMC MORTGAGE LOANS BY
COMPANY
Section 3.01 THE COMPANY.
The Company shall service and administer the EMC Mortgage Loans
in
accordance with customary and usual standards of practice of
prudent mortgage
loan servicers in the respective states in which the related
Mortgaged
Properties are located. In connection with such servicing and
administration,
the Company shall have full power and authority, acting alone
and/or through
subservicers as provided in Section 3.03, to do or cause to be
done any and all
things that it may deem necessary or desirable in connection
with such servicing
and administration, including but not limited to, the power and
authority,
subject to the terms hereof (i) to execute and deliver, on
behalf of the
Certificateholders and the Trustee, customary consents or
waivers and other
instruments and documents, (ii) to consent to transfers of any
related Mortgaged
Property and assumptions of the Mortgage Notes and related
Mortgages (but only
in the manner provided herein), (iii) to collect any Insurance
Proceeds and
other Liquidation Proceeds, and (iv) subject to Section 3.09, to
effectuate
foreclosure or other conversion of the ownership of the
Mortgaged Property
securing any EMC Mortgage Loan; provided that the Company shall
take no action
that is inconsistent with or prejudices the interests of the
Trust Fund or the
Certificateholders in any EMC Mortgage Loan or the rights and
interests of the
Depositor and the Trustee under this Agreement.
Without limiting the generality of the foregoing, the Company,
in its
own name or in the name of the Trust, the Depositor or the
Trustee, is hereby
authorized and empowered by the Trust, the Depositor and the
Trustee, when the
Company believes it appropriate in its reasonable judgment, to
execute and
deliver, on behalf of the Trustee, the Depositor, the
Certificateholders or any
of them, any and all instruments of satisfaction or
cancellation, or of partial
or full release or discharge and all other comparable
instruments, with respect
to the EMC Mortgage Loans, and with respect to the related
Mortgaged Properties
held for the benefit of the Certificateholders. The Company
shall prepare and
deliver to the Depositor and/or the Trustee such documents
requiring execution
and delivery by any or all of them as are necessary or
appropriate to enable the
Company to service and administer the EMC Mortgage Loans. Upon
receipt of such
documents, the Depositor and/or the Trustee shall execute such
documents and
deliver them to the Company.
In accordance with the standards of the first paragraph of this
Section
3.01, the Company shall advance or cause to be advanced funds as
necessary for
the purpose of effecting the payment of taxes and assessments on
the Mortgaged
Properties relating to the EMC Mortgage Loans, which advances
shall be
reimbursable in the first instance from related collections from
the Mortgagors
pursuant to Section 5.04, and further as provided in Section
5.02. All costs
incurred by the Company, if any, in effecting the timely
payments of taxes and
assessments on the Mortgaged Properties relating to the EMC
Mortgage Loans and
related insurance premiums shall not, for the purpose of
calculating monthly
distributions to the Certificateholders, be added
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to the Stated Principal Balance under the related EMC Mortgage
Loans,
notwithstanding that the terms of such Mortgage Loans so
permit.
Section 3.02 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS.
(a) Except as otherwise provided in this Section 3.02,
when any property subject to a Mortgage has been or is about to
be conveyed by
the Mortgagor, the Company shall to the extent that it has
knowledge of such
conveyance, enforce any due-on-sale clause contained in any
Mortgage Note or
Mortgage, to the extent permitted under applicable law and
governmental
regulations, but only to the extent that such enforcement will
not adversely
affect or jeopardize coverage under any Required Insurance
Policy.
Notwithstanding the foregoing, the Company is not required to
exercise such
rights with respect to an EMC Mortgage Loan if the Person to
whom the related
Mortgaged Property has been conveyed or is proposed to be
conveyed satisfies the
terms and conditions contained in the Mortgage Note and Mortgage
related thereto
and the consent of the mortgagee under such Mortgage Note or
Mortgage is not
otherwise so required under such Mortgage Note or Mortgage as a
condition to
such transfer. In the event that the Company is prohibited by
law from enforcing
any such due-on-sale clause, or if coverage under any Required
Insurance Policy
would be adversely affected, or if nonenforcement is otherwise
permitted
hereunder, the Company is authorized, subject to Section
3.02(b), to take or
enter into an assumption and modification agreement from or with
the person to
whom such property has been or is about to be conveyed, pursuant
to which such
person becomes liable under the Mortgage Note and, unless
prohibited by
applicable state law, the Mortgagor remains liable thereon,
provided that the
Mortgage Loan shall continue to be covered (if so covered before
the Company
enters such agreement) by the applicable Required Insurance
Policies. The
Company, subject to Section 3.02(b), is also authorized with the
prior approval
of the insurers under any Required Insurance Policies to enter
into a
substitution of liability agreement with such Person, pursuant
to which the
original Mortgagor is released from liability and such Person is
substituted as
Mortgagor and becomes liable under the Mortgage Note.
Notwithstanding the
foregoing, the Company shall not be deemed to be in default
under this Section
3.02(a) by reason of any transfer or assumption that the Company
reasonably
believes it is restricted by law from preventing.
(b) Subject to the Company's duty to enforce any
due-on-sale clause to the extent set forth in Section 3.02(a),
in any case in
which a Mortgaged Property has been conveyed to a Person by a
Mortgagor, and
such Person is to enter into an assumption agreement or
modification agreement
or supplement to the Mortgage Note or Mortgage that requires the
signature of
the Trustee, or if an instrument of release signed by the
Trustee is required
releasing the Mortgagor from liability on the related EMC
Mortgage Loan, the
Company shall prepare and deliver or cause to be prepared and
delivered to the
Trustee for signature and shall direct, in writing, the Trustee
to execute the
assumption agreement with the Person to whom the Mortgaged
Property is to be
conveyed and such modification agreement or supplement to the
Mortgage Note or
Mortgage or other instruments as are reasonable or necessary to
carry out the
terms of the Mortgage Note or Mortgage or otherwise to comply
with any
applicable laws regarding assumptions or the transfer of the
Mortgaged Property
to such Person. In connection with any such assumption, no
material term of the
Mortgage Note (including, but not limited to, the Mortgage Rate,
the amount of
the Scheduled Payment and any other term affecting the
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amount or timing of payment on the EMC Mortgage Loan) may be
changed. In
addition, the substitute Mortgagor and the Mortgaged Property
must be acceptable
to the Company in accordance with its servicing standards as
then in effect. The
Company shall notify the Trustee that any such substitution or
assumption
agreement has been completed by forwarding to the Trustee the
original of such
substitution or assumption agreement, which in the case of the
original shall be
added to the related Mortgage File and shall, for all purposes,
be considered a
part of such Mortgage File to the same extent as all other
documents and
instruments constituting a part thereof. Any fee collected by
the Company for
entering into an assumption or substitution of liability
agreement will be
retained by the Company as additional servicing
compensation.
Section 3.03 SUBSERVICERS.
The Company shall perform all of its servicing
responsibilities
hereunder or may cause a subservicer to perform any such
servicing
responsibilities on its behalf, but the use by the Company of a
subservicer
shall not release the Company from any of its obligations
hereunder and the
Company shall remain responsible hereunder for all acts and
omissions of each
subservicer as fully as if such acts and omissions were those of
the Company.
The Company shall pay all fees of each subservicer from its own
funds, and a
subservicer's fee shall not exceed the Servicing Fee payable to
the Company
hereunder.
At the cost and expense of the Company, without any right of
reimbursement from its Protected Account, the Company shall be
entitled to
terminate the rights and responsibilities of a subservicer and
arrange for any
servicing responsibilities to be performed by a successor
subservicer; provided,
however, that nothing contained herein shall be deemed to
prevent or prohibit
the Company, at the Company's option, from electing to service
the related EMC
Mortgage Loans itself. In the event that the Company's
responsibilities and
duties under this Agreement are terminated pursuant to Section
9.03, the Company
shall at its own cost and expense terminate the rights and
responsibilities of
each subservicer effective as of the date of termination of the
Company. The
Company shall pay all fees, expenses or penalties necessary in
order to
terminate the rights and responsibilities of each subservicer
from the Company's
own funds without reimbursement from the Trust Fund.
Notwithstanding the foregoing, the Company shall not be relieved
of its
obligations hereunder and shall be obligated to the same extent
and under the
same terms and conditions as if it alone were servicing and
administering the
EMC Mortgage Loans. The Company shall be entitled to enter into
an agreement
with a subservicer for indemnification of the Company by the
subservicer and
nothing contained in this Agreement shall be deemed to limit or
modify such
indemnification.
Any subservicing agreement and any other transactions or
services
relating to the EMC Mortgage Loans involving a subservicer shall
be deemed to be
between such subservicer and the Company alone, and neither the
Master Servicer
nor the Trustee shall have any obligations, duties or
liabilities with respect
to such subservicer including any obligation, duty or liability
of either the
Master Servicer or the Trustee to pay such subservicer's fees
and expenses. For
purposes of remittances to the Master Servicer pursuant to this
Agreement, the
Company shall be
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deemed to have received a payment on an EMC Mortgage Loan when a
subservicer has
received such payment.
Section 3.04 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF
COMPANY TO
BE HELD FOR TRUSTEE.
Notwithstanding any other provisions of this Agreement, the
Company
shall transmit to the Trustee as required by this Agreement all
documents and
instruments in respect of an EMC Mortgage Loan coming into the
possession of the
Company from time to time and shall account fully to the Trustee
for any funds
received by the Company or that otherwise are collected by the
Company as
Liquidation Proceeds or Insurance Proceeds in respect of any
such Mortgage Loan.
All Mortgage Files and funds collected or held by, or under the
control of, the
Company in respect of any EMC Mortgage Loans, whether from the
collection of
principal and interest payments or from Liquidation Proceeds,
including but not
limited to, any funds on deposit in the Protected Account
maintained by the
Company, shall be held by the Company for and on behalf of the
Trustee and shall
be and remain the sole and exclusive property of the Trustee,
subject to the
applicable provisions of this Agreement. The Company also agrees
that it shall
not create, incur or subject any Mortgage File or any funds that
are deposited
in the Protected Account maintained by the Company or the Master
Servicer
Collection Account or in any Escrow Account, or any funds that
otherwise are or
may become due or payable to the Trustee for the benefit of
the
Certificateholders, to any claim, lien, security interest,
judgment, levy, writ
of attachment or other encumbrance, or assert by legal action or
otherwise any
claim or right of set off against any Mortgage File or any funds
collected on,
or in connection with, an EMC Mortgage Loan, except, however,
that the Company
shall be entitled to set off against and deduct from any such
funds any amounts
that are properly due and payable to the Company under this
Agreement.
Section 3.05 MAINTENANCE OF HAZARD INSURANCE.
The Company shall cause to be maintained, for each EMC Mortgage
Loan,
hazard insurance on buildings upon, or comprising part of, the
Mortgaged
Property against loss by fire, hazards of extended coverage and
such other
hazards as are customary in the area where the related Mortgaged
Property is
located with an insurer which is licensed to do business in the
state where the
related Mortgaged Property is located. Each such policy of
standard hazard
insurance shall contain, or have an accompanying endorsement
that contains, a
standard mortgagee clause. The Company shall also cause flood
insurance to be
maintained on property acquired upon foreclosure or deed in lieu
of foreclosure
of any EMC Mortgage Loan, to the extent described below.
Pursuant to Section
5.01, any amounts collected by the Company under any such
policies (other than
the amounts to be applied to the restoration or repair of the
related Mortgaged
Property or property thus acquired or amounts released to the
Mortgagor in
accordance with the Company's normal servicing procedures) shall
be deposited in
the Protected Account maintained by the Company. Any cost
incurred by the
Company in maintaining any such insurance shall not, for the
purpose of
calculating monthly distributions to the Certificateholders or
remittances to
the Trustee for their benefit, be added to the principal balance
of the Mortgage
Loan, notwithstanding that the terms of the EMC Mortgage Loan so
permit. Such
costs shall be recoverable by the Company out of late payments
by the related
Mortgagor or out of Liquidation
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Proceeds to the extent permitted by Section 5.02. It is
understood and agreed
that no earthquake or other additional insurance is to be
required of any
Mortgagor or maintained on property acquired in respect of a
Mortgage other than
pursuant to such applicable laws and regulations as shall at any
time be in
force and as shall require such additional insurance. If the
Mortgaged Property
is located at the time of origination of the related EMC
Mortgage Loan in a
federally designated special flood hazard area and such area is
participating in
the national flood insurance program, the Company shall cause
flood insurance to
be maintained with respect to such EMC Mortgage Loan. Such flood
insurance shall
be in an amount equal to the least of (i) the Stated Principal
Balance of the
related EMC Mortgage Loan, (ii) minimum amount required to
compensate for damage
or loss on a replacement cost basis or (iii) the maximum amount
of such
insurance available for the related Mortgaged Property under the
Flood Disaster
Protection Act of 1973, as amended.
In the event that the Company shall obtain and maintain a
blanket
policy insuring against hazard losses on all of the EMC Mortgage
Loans, it shall
conclusively be deemed to have satisfied its obligations as set
forth in the
first sentence of this Section 3.05, it being understood and
agreed that such
policy may contain a deductible clause on terms substantially
equivalent to
those commercially available and maintained by comparable
servicers. If such
policy contains a deductible clause, the Company shall, in the
event that there
shall not have been maintained on the related Mortgaged Property
a policy
complying with the first sentence of this Section 3.05, and
there shall have
been a loss that would have been covered by such policy, deposit
in the
Protected Account maintained by the Company the amount not
otherwise payable
under the blanket policy because of such deductible clause. Such
deposit shall
be from the Company's own funds without reimbursement therefor.
In connection
with its activities as administrator and servicer of the EMC
Mortgage Loans, the
Company agrees to present, on behalf of itself, the Depositor
and the Trustee
for the benefit of the Certificateholders, claims under any such
blanket policy.
Section 3.06 PRESENTMENT OF CLAIMS AND COLLECTION OF
PROCEEDS.
The Company shall prepare and present on behalf of the Trustee
and the
Certificateholders all claims under the Insurance Policies
relating to the EMC
Mortgage Loans and take such actions (including the negotiation,
settlement,
compromise or enforcement of the insured's claim) as shall be
necessary to
realize recovery under such Insurance Policies. Any proceeds
disbursed to the
Company in respect of such Insurance Policies shall be promptly
deposited in the
Protected Account maintained by the Company upon receipt, except
that any
amounts realized that are to be applied to the repair or
restoration of the
related Mortgaged Property as a condition precedent to the
presentation of
claims on the related EMC Mortgage Loan to the insurer under any
applicable
Insurance Policy need not be so deposited (or remitted).
Section 3.07 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE
POLICIES.
(a) The Company shall not take any action that would
result in noncoverage under any applicable Primary Mortgage
Insurance Policy of
any loss which, but for the actions of the Company would have
been covered
thereunder. The Company shall use its best efforts to keep in
force and effect
(to the extent that the EMC Mortgage Loan requires the Mortgagor
to
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maintain such insurance), Primary Mortgage Insurance applicable
to each EMC
Mortgage Loan. The Company shall not cancel or refuse to renew
any such Primary
Mortgage Insurance Policy that is in effect at the date of the
initial issuance
of the related Mortgage Note and is required to be kept in force
hereunder.
(b) The Company agrees to present on behalf of the
Trustee and the Certificateholders, claims to the insurer under
any Primary
Mortgage Insurance Policies relating to the EMC Mortgage Loans
and, in this
regard, to take such reasonable action as shall be necessary to
permit recovery
under any Primary Mortgage Insurance Policies respecting
defaulted EMC Mortgage
Loans. Pursuant to Section 5.01, any amounts collected by the
Company under any
Primary Mortgage Insurance Policies shall be deposited in the
Protected Account
maintained by the Company, subject to withdrawal pursuant to
Section 5.02
hereof.
Section 3.08 FIDELITY BOND, ERRORS AND OMISSIONS INSURANCE.
The Company shall maintain, at its own expense, a blanket
fidelity bond
and an errors and omissions insurance policy, with broad
coverage with
responsible companies on all officers, employees or other
persons acting in any
capacity with regard to the EMC Mortgage Loans and who handle
funds, money,
documents and papers relating to the EMC Mortgage Loans. The
fidelity bond and
errors and omissions insurance shall be in the form of the
Mortgage Banker's
Blanket Bond and shall protect and insure the Company against
losses, including
forgery, theft, embezzlement, fraud, errors and omissions and
negligent acts of
such persons. Such fidelity bond shall also protect and insure
the Company
against losses in connection with the failure to maintain any
insurance policies
required pursuant to this Agreement and the release or
satisfaction of an EMC
Mortgage Loan which is not in accordance with Accepted Servicing
Practices. No
provision of this Section 3.08 requiring the fidelity bond and
errors and
omissions insurance shall diminish or relieve the Company from
its duties and
obligations as set forth in this Agreement. The minimum coverage
under any such
bond and insurance policy shall be at least equal to the
corresponding amounts
required by Accepted Servicing Practices. The Company shall
deliver to the
Master Servicer a certificate from the surety and the insurer as
to the
existence of the fidelity bond and errors and omissions
insurance policy and
shall obtain a statement from the surety and the insurer that
such fidelity bond
or insurance policy shall in no event be terminated or
materially modified
without thirty days prior written notice to the Master Servicer
and the Trustee.
The Company shall notify the Master Servicer and the Trustee
within five
business days of receipt of notice that such fidelity bond or
insurance policy
will be, or has been, materially modified or terminated. The
Trustee for the
benefit of the Certificateholders must be named as loss payees
on the fidelity
bond and as additional insured on the errors and omissions
policy.
Section 3.09 REALIZATION UPON DEFAULTED MORTGAGE LOANS;
DETERMINATION
OF EXCESS LIQUIDATION PROCEEDS AND REALIZED LOSSES; REPURCHASES
OF CERTAIN
MORTGAGE LOANS.
(a) The Company shall use reasonable efforts to foreclose
upon or otherwise comparably convert the ownership of properties
securing such
of the EMC Mortgage Loans as come into and continue in default
and as to which
no satisfactory arrangements can be made for
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collection of delinquent payments. In connection with such
foreclosure or other
conversion, the Company shall follow such practices and
procedures as it shall
deem necessary or advisable and as shall be normal and usual in
its general
mortgage servicing activities and the requirements of the
insurer under any
Required Insurance Policy; provided that the Company shall not
be required to
expend its own funds in connection with any foreclosure or
towards the
restoration of any property unless it shall determine (i) that
such restoration
and/or foreclosure will increase the proceeds of liquidation of
the EMC Mortgage
Loan after reimbursement to itself of such expenses and (ii)
that such expenses
will be recoverable to it through Insurance Proceeds or
Liquidation Proceeds
(respecting which it shall have priority for purposes of
withdrawals from the
Protected Account maintained by the Company pursuant to Section
5.02). If the
Company reasonably believes that Liquidation Proceeds with
respect to any such
EMC Mortgage Loan would not be increased as a result of such
foreclosure or
other action, such EMC Mortgage Loan will be charged-off and
will become a
Liquidated Loan. The Company will give notice of any such
charge-off to the
Trustee and the Securities Administrator. The Company shall be
responsible for
all other costs and expenses incurred by it in any such
proceedings; provided
that such costs and expenses shall be Servicing Advances and
that it shall be
entitled to reimbursement thereof from the proceeds of
liquidation of the
related Mortgaged Property, as contemplated in Section 5.02. If
the Company has
knowledge that a Mortgaged Property that the Company is
contemplating acquiring
in foreclosure or by deed- in-lieu of foreclosure is located
within a one-mile
radius of any site with environmental or hazardous waste risks
known to the
Company, the Company will, prior to acquiring the related
Mortgaged Property,
consider such risks and only take action in accordance with its
established
environmental review procedures.
With respect to any REO Property relating to an EMC Mortgage
Loan, the
deed or certificate of sale shall be taken in the name of the
Trustee for the
benefit of the Certificateholders (or the Trustee's nominee on
behalf of the
Certificateholders). The Trustee's name shall be placed on the
title to such REO
Property solely as the Trustee hereunder and not in its
individual capacity. The
Company shall ensure that the title to such REO Property
references this
Agreement and the Trustee's capacity hereunder. Pursuant to its
efforts to sell
such REO Property, the Company shall either itself or through an
agent selected
by the Company protect and conserve such REO Property in the
same manner and to
such extent as is customary in the locality where such REO
Property is located
and may, incident to its conservation and protection of the
interests of the
Certificateholders, rent the same, or any part thereof, as the
Company deems to
be in the best interest of the Company and the
Certificateholders for the period
prior to the sale of such REO Property. The Company shall
prepare for and
deliver to the Trustee and the Securities Administrator a
statement with respect
to each such REO Property that has been rented showing the
aggregate rental
income received and all expenses incurred in connection with the
management and
maintenance of such REO Property at such times as is necessary
to enable the
Trustee to comply with the reporting requirements of the REMIC
Provisions. The
net monthly rental income, if any, from such REO Property shall
be deposited in
the Protected Account maintained by the Company no later than
the close of
business on each Determination Date. The Company shall perform
the tax reporting
and withholding related to foreclosures, abandonments and
cancellation of
indebtedness income as specified by Sections 1445, 6050J and
6050P of the Code
by preparing and filing such tax and information returns, as may
be required.
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In the event that the Trust Fund acquires any Mortgaged Property
as
aforesaid or otherwise in connection with a default or imminent
default on an
EMC Mortgage Loan, the Company shall dispose of such Mortgaged
Property prior to
three years after its acquisition by the Trust Fund or, at the
expense of the
Trust Fund, request more than 60 days prior to the day on which
such three-year
period would otherwise expire, an extension of the three-year
grace period
unless the Trustee shall have been supplied with an Opinion of
Counsel addressed
to the Trustee (such opinion not to be an expense of the
Trustee) to the effect
that the holding by the Trust Fund of such Mortgaged Property
subsequent to such
three-year period will not result in the imposition of taxes on
"prohibited
transactions" of REMIC I or REMIC II as defined in section 860F
of the Code or
cause either REMIC I or REMIC II to fail to qualify as a REMIC
at any time that
any Certificates are outstanding, in which case the Trust Fund
may continue to
hold such Mortgaged Property (subject to any conditions
contained in such
Opinion of Counsel). Notwithstanding any other provision of this
Agreement, no
Mortgaged Property acquired by the Trust Fund shall be rented
(or allowed to
continue to be rented) or otherwise used for the production of
income by or on
behalf of the Trust Fund in such a manner or pursuant to any
terms that would
(i) cause such Mortgaged Property to fail to qualify as
"foreclosure property"
within the meaning of section 860G(a)(8) of the Code or (ii)
subject any of
REMIC I or REMIC II to the imposition of any federal, state or
local income
taxes on the income earned from such Mortgaged Property under
section 860G(c) of
the Code or otherwise, unless the Company has agreed to
indemnify and hold
harmless the Trust Fund with respect to the imposition of any
such taxes.
The decision of the Company to foreclose on a defaulted EMC
Mortgage
Loan shall be subject to a determination by the Company that the
proceeds of
such foreclosure would exceed the costs and expenses of bringing
such a
proceeding. The income earned from the management of any
Mortgaged Properties
acquired through foreclosure or other judicial proceeding, net
of reimbursement
to the Company for expenses incurred (including any property or
other taxes) in
connection with such management and net of unreimbursed
Servicing Fees,
Advances, Servicing Advances and any management fee paid or to
be paid with
respect to the management of such Mortgaged Property, shall be
applied to the
payment of principal of, and interest on, the related defaulted
EMC Mortgage
Loans (with interest accruing as though such Mortgage Loans were
still current)
and all such income shall be deemed, for all purposes in the
Agreement, to be
payments on account of principal and interest on the related
Mortgage Notes and
shall be deposited into the Protected Account maintained by the
Company. To the
extent the income received during a Prepayment Period is in
excess of the amount
attributable to amortizing principal and accrued interest at the
related
Mortgage Rate on the related EMC Mortgage Loan, such excess
shall be considered
to be a partial Principal Prepayment for all purposes
hereof.
The Liquidation Proceeds from any liquidation of an EMC Mortgage
Loan,
net of any payment to the Company as provided above, shall be
deposited in the
Protected Account maintained by the Company on the next
succeeding Determination
Date following receipt thereof for distribution on the related
Distribution
Date, except that any Excess Liquidation Proceeds shall be
retained by the
Company as additional servicing compensation.
The proceeds of any Liquidated Loan, as well as any recovery
resulting
from a partial collection of Liquidation Proceeds or any income
from an REO
Property, will be applied in the following order of priority:
first, to
reimburse the Company for any related unreimbursed
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Servicing Advances and Servicing Fees, pursuant to Section 5.02
or this Section
3.09; second, to reimburse the Company for any unreimbursed
Advances, pursuant
to Section 5.02 or this Section 3.09; third, to accrued and
unpaid interest (to
the extent no Advance has been made for such amount) on the EMC
Mortgage Loan or
related REO Property, at the Net Mortgage Rate to the first day
of the month in
which such amounts are required to be distributed; and fourth,
as a recovery of
principal of the EMC Mortgage Loan.
(b) On each Determination Date, the Company shall
determine the respective aggregate amounts of Excess Liquidation
Proceeds and
Realized Losses, if any, for the related Prepayment Period.
(c) The Company has no intent to foreclose on any EMC
Mortgage Loan based on the delinquency characteristics as of the
Closing Date;
provided, that the foregoing does not prevent the Company from
initiating
foreclosure proceedings on any date hereafter if the facts and
circumstances of
such EMC Mortgage Loans including delinquency characteristics in
the Company's
discretion so warrant such action.
Section 3.10 SERVICING COMPENSATION.
As compensation for its activities hereunder, the Company shall
be
entitled to retain or withdraw from its Protected Account out of
each payment of
interest on an EMC Mortgage Loan included in the Trust Fund an
amount equal to
the Servicing Fee.
Additional servicing compensation in the form of any Excess
Liquidation
Proceeds, assumption fees, late payment charges, all Prepayment
Interest Excess
on any EMC Mortgage Loan, all income and gain net of any losses
realized from
Permitted Investments with respect to funds in or credited to
the Protected
Account maintained by the Company shall be retained by the
Company to the extent
not required to be deposited in the Protected Account maintained
by the Company
pursuant to Section 5.02. The Company shall be required to pay
all expenses
incurred by it in connection with its servicing activities
hereunder (including
payment of any premiums for hazard insurance, as required by
Section 3.05 and
maintenance of the other forms of insurance coverage required by
Section 3.07)
and shall not be entitled to reimbursement therefor except as
specifically
provided in Section 5.02.
EMC will be entitled to retain any Prepayment Interest Excess
pursuant
to Section 5.07(e).
Section 3.11 REO PROPERTY.
(a) In the event the Trust Fund acquires ownership of any
REO Property in respect of any related EMC Mortgage Loan, the
deed or
certificate of sale shall be issued to the Trustee, or to its
nominee, on behalf
of the related Certificateholders. The Company shall sell any
such REO Property
as expeditiously as possible and in accordance with the
provisions of this
Agreement. Pursuant to its efforts to sell such REO Property,
the Company shall
protect and conserve such REO Property in the manner and to the
extent required
herein, in accordance with the REMIC Provisions.
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(b) The Company shall deposit all funds collected and
received in connection with the operation of any REO Property in
respect of any
EMC Mortgage Loan into the Protected Account maintained by the
Company.
(c) The Company, upon the final disposition of any REO
Property in respect of any EMC Mortgage Loan, shall be entitled
to reimbursement
for any related unreimbursed Advances, unreimbursed Servicing
Advances or
Servicing Fees from Liquidation Proceeds received in connection
with the final
disposition of such REO Property; provided, that any such
unreimbursed Advances
or Servicing Fees as well as any unpaid Servicing Fees may be
reimbursed or
paid, as the case may be, prior to final disposition, out of any
net rental
income or other net amounts derived from such REO Property.
Section 3.12 LIQUIDATION REPORTS.
Upon the foreclosure of any Mortgaged Property relating to an
EMC
Mortgage Loan or the acquisition thereof by the Trust Fund
pursuant to a
deed-in-lieu of foreclosure, the Company shall submit a
liquidation report to
the Master Servicer containing such information as shall be
mutually acceptable
to the Company and the Master Servicer with respect to such
Mortgaged Property.
Section 3.13 ANNUAL STATEMENT AS TO COMPLIANCE; ANNUAL
CERTIFICATION.
(a) The Company will deliver to the Master Servicer not
later than March 1, 2006 and not later than March 1 of each year
thereafter, a
certificate of a Servicing Officer stating, as to each signatory
thereof, that
(i) a review of the activities of the Company during the
preceding calendar year
and of performance under this Agreement has been made under such
officers'
supervision, and (ii) to the best of such officers' knowledge,
based on such
review, the Company has fulfilled all of its obligations under
this Agreement
throughout such year, or, if there has been a default in the
fulfillment of any
such obligation, specifying each such default known to such
officers and the
nature and status thereof except for such defaults as such
officer in its good
faith judgment believe to be immaterial.
(b) (i) The Company will deliver to the Master Servicer,
on or before March 1 of each year beginning March 1, 2006 (or,
if any such day
is not a Business Day, the immediately preceding Business Day),
or on any
alternative date specified by the Master Servicer upon thirty
(30) days written
request, a certification containing the information set forth in
Exhibit K. Such
certification shall be signed by the senior officer in charge of
servicing of
the Company. In addition, the Company shall provide such other
information with
respect to the EMC Mortgage Loans and the servicing and
administration thereof
within the control of the Company which shall be required to
enable the Master
Servicer to comply with the reporting requirements of the
Securities and
Exchange Act of 1934, as amended.
(ii) The Company shall indemnify and hold harmless the
Master Servicer and its officers, directors, agents and
affiliates from
and against any losses, damages, penalties, fines,
forfeitures,
reasonable legal fees and related costs, judgments and other
costs and
expenses arising out of or based upon a breach by the Company or
any of
its
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officers, directors, agents or affiliates of its obligations
under this
Section 3.13(b) or the Company's negligence, bad faith or
willful
misconduct in connection therewith. If the indemnification
provided for
herein is unavailable or insufficient to hold harmless the
Master
Servicer, then the Company agrees that it shall contribute to
the
amount paid or payable by the Master Servicer as a result of
the
losses, claims, damages or liabilities of the Master Servicer in
such
proportion as is appropriate to reflect the relative fault of
the
Master Servicer on the one hand and the Company on the other
in
connection with a breach of the Company's obligations under
this
Section 3.13(b).
Section 3.14 ANNUAL INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS'
SERVICING
REPORT.
The Company at its expense shall cause a firm of independent
public
accountants which is a member of the American Institute of
Certified Public
Accountants to furnish not later than March 1, 2006 and not
later than March 1
of each year thereafter a statement, in a form acceptable for
filing with the
Commission on an Exhibit to Form 10-K, to the Master Servicer to
the effect
that, with respect to the preceding calendar year such firm has
examined certain
documents and records relating to the Company's servicing of
mortgage loans of
the same type as the EMC Mortgage Loans pursuant to servicing
agreements
substantially similar to this Agreement, which agreements may
include this
Agreement, and that, on the basis of such an examination,
conducted
substantially in compliance with the Uniform Single Attestation
Program for
Mortgage Bankers, such firm is of the opinion that the Company's
servicing has
been conducted in compliance with the agreements examined
pursuant to this
Section 3.14, except for (i) such exceptions as such firm shall
believe to be
immaterial,(ii) such other exceptions as shall be set forth in
such statement
and (iii) such exceptions that the Uniform Single Attestation
Program for
Mortgage Bankers requires it to report.
Section 3.15 BOOKS AND RECORDS.
The Company shall be responsible for maintaining, and shall
maintain, a
complete set of books and records for the EMC Mortgage Loans
which shall be
appropriately identified in the Company's computer system to
clearly reflect the
ownership of the EMC Mortgage Loans by the Trust. In particular,
the Company
shall maintain in its possession, available for inspection by
the Master
Servicer and the Trustee and shall deliver to Master Servicer
and the Trustee
upon demand, evidence of compliance with all federal, state and
local laws,
rules and regulations. To the extent that original documents are
not required
for purposes of realization of Liquidation Proceeds or Insurance
Proceeds,
documents maintained by the Company may be in the form of
microfilm or
microfiche or such other reliable means of recreating original
documents,
including, but not limited to, optical imagery techniques so
long as the Company
complies with the requirements of Accepted Servicing
Practices.
The Company shall maintain with respect to each EMC Mortgage
Loan and
shall make available for inspection by the Master Servicer and
the Trustee the
related servicing file during the time such EMC Mortgage Loan is
subject to this
Agreement and thereafter in accordance with applicable law.
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ARTICLE IV
ADMINISTRATION AND MASTER SERVICING OF MORTGAGE LOANS BY MASTER
SERVICER
Section 4.01 MASTER SERVICER. The Master Servicer shall,
beginning on
the Closing Date, supervise, monitor and oversee the obligation
of the Company
and the related Servicer to service and administer their
respective Mortgage
Loans in accordance with the terms of this Agreement and the
related Servicing
Agreement and shall have full power and authority to do any and
all things which
it may deem necessary or desirable in connection with such
master servicing and
administration. In performing its obligations hereunder, the
Master Servicer
shall act in a manner consistent with Accepted Master Servicing
Practices.
Furthermore, the Master Servicer shall oversee and consult with
the Company and
the related Servicer as necessary from time-to-time to carry out
the Master
Servicer's obligations hereunder, shall receive, review and
evaluate all
reports, information and other data provided to the Master
Servicer by the
Company and the related Servicer and shall cause the Company and
related
Servicer to perform and observe the covenants, obligations and
conditions to be
performed or observed by such Person under this Agreement and
the related
Servicing Agreement. The Master Servicer shall independently and
separately
monitor the Company and the related Servicer's servicing
activities with respect
to each related Mortgage Loan, reconcile the results of such
monitoring with
such information provided in the previous sentence on a monthly
basis and
coordinate corrective adjustments to the Company's, the related
Servicer's and
Master Servicer's records, and based on such reconciled and
corrected
information, the Master Servicer shall provide such information
to the
Securities Administrator as shall be necessary in order for it
to prepare the
statements specified in Section 6.06 and any other information
and statements
required hereunder. The Master Servicer shall reconcile the
results of its
Mortgage Loan monitoring with the actual remittances of the
Company and each
Servicer pursuant to this Agreement and the related Servicing
Agreement.
The Trustee shall furnish the Company, the Servicers and the
Master
Servicer with any powers of attorney and other documents in form
as provided to
it necessary or appropriate to enable the Company, the Servicer
and the Master
Servicer to service and administer the related Mortgage Loans
and REO Property.
The Trustee and the Securities Administrator shall provide
access to
the records and documentation in possession of the Trustee or
the Securities
Administrator regarding the related Mortgage Loans and REO
Property and the
servicing thereof to the Certificateholders, the FDIC, and the
supervisory
agents and examiners of the FDIC, such access being afforded
only upon
reasonable prior written request and during normal business
hours at the office
of the Trustee or the Securities Administrator; provided,
however, that, unless
otherwise required by law, neither the Trustee nor the
Securities Administrator
shall be required to provide access to such records and
documentation if the
provision thereof would violate the legal right to privacy of
any Mortgagor. The
Trustee and the Securities Administrator shall allow
representatives of the
above entities to photocopy any of the records and documentation
and shall
provide equipment for that purpose at a charge that covers the
Trustee's or the
Securities Administrator's actual costs.
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The Trustee shall execute and deliver to the Company or the
related
Servicer and the Master Servicer any court pleadings, requests
for trustee's
sale or other documents necessary or desirable to (i) the
foreclosure or
trustee's sale with respect to a Mortgaged Property; (ii) any
legal action
brought to obtain judgment against any Mortgagor on the Mortgage
Note or
Security Instrument; (iii) obtain a deficiency judgment against
the Mortgagor;
or (iv) enforce any other rights or remedies provided by the
Mortgage Note or
Security Instrument or otherwise available at law or equity.
Section 4.02 REMIC-RELATED COVENANTS. For as long as each REMIC
shall
exist, the Trustee and the Securities Administrator shall act in
accordance
herewith to assure continuing treatment of such REMIC as a
REMIC, and the
Trustee and the Securities Administrator shall comply with any
directions of the
Seller, the Company, the Servicers or the Master Servicer to
assure such
continuing treatment. In particular, the Trustee shall not (a)
sell or permit
the sale of all or any portion of the Mortgage Loans or of any
investment of
deposits in an Account unless such sale is as a result of a
repurchase of the
Mortgage Loans pursuant to this Agreement or the Trustee has
received a REMIC
Opinion addressed to the Trustee prepared at the expense of the
Trust Fund; and
(b) other than with respect to a substitution pursuant to the
Mortgage Loan
Purchase Agreement or Section 2.04 of this Agreement, as
applicable, accept any
contribution to any REMIC after the Startup Day without receipt
of a REMIC
Opinion.
Section 4.03 MONITORING OF COMPANY AND SERVICER. (a) The
Master
Servicer shall be responsible for reporting to the Trustee and
the Seller the
compliance by the Company and the related Servicer with its
duties under this
Agreement and the related Servicing Agreement. In the review of
the Company's
and the related Servicer's activities, the Master Servicer may
rely upon an
Officer's Certificate of the Company and the related Servicer
with regard to
such Person's compliance with the terms of this Agreement or the
related
Servicing Agreement. In the event that the Master Servicer, in
its judgment,
determines that the Company or the related Servicer should be
terminated in
accordance with this Agreement or the related Servicing
Agreement, or that a
notice should be sent pursuant to this Agreement or the related
Servicing
Agreement with respect to the occurrence of an event that,
unless cured, would
constitute grounds for such termination, the Master Servicer
shall notify the
Seller and the Trustee thereof and the Master Servicer shall
issue such notice
or take such other action as it deems appropriate.
(b) The Master Servicer, for the benefit of the Trustee
and the Certificateholders, shall enforce the obligations of the
Company under
this Agreement and the related Servicer under the related
Servicing Agreement,
and shall, in the event that the Company or the related Servicer
fails to
perform its obligations in accordance with this Agreement or the
related
Servicing Agreement, subject to the preceding paragraph,
terminate the rights
and obligations of such Person thereunder and act as servicer of
the related
Mortgage Loans or to cause the Trustee to enter into a new
Servicing Agreement
with a successor Servicer selected by the Master Servicer;
provided, however, it
is understood and acknowledged by the parties hereto that there
will be a period
of transition (not to exceed 90 days) before the actual
servicing functions can
be fully transferred to such successor Servicer. Such
enforcement, including,
without limitation, the legal prosecution of claims, termination
of the related
Servicing Agreement and the pursuit of other appropriate
remedies, shall be in
such form and carried out to such an extent and at such time as
the Master
Servicer, in its good faith business judgment,
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would require were it the owner of the related Mortgage Loans.
The Master
Servicer shall pay the costs of such enforcement at its own
expense, subject to
its right of reimbursement pursuant to the provisions of this
Agreement or the
related Servicing Agreement, provided that the Master Servicer
shall not be
required to prosecute or defend any legal action except to the
extent that the
Master Servicer shall have received reasonable indemnity for its
costs and
expenses in pursuing such action.
(c) To the extent that the costs and expenses of the
Master Servicer related to any termination of the Company or the
related
Servicer, appointment of a successor Servicer or the transfer
and assumption of
servicing by the Master Servicer with respect to this Agreement
or the related
Servicing Agreement (including, without limitation, (i) all
legal costs and
expenses and all due diligence costs and expenses associated
with an evaluation
of the potential termination of the Company or the related
Servicer as a result
of an event of default by such Person and (ii) all costs and
expenses associated
with the complete transfer of servicing, including all servicing
files and all
servicing data and the completion, correction or manipulation of
such servicing
data as may be required by the successor servicer to correct any
errors or
insufficiencies in the servicing data or otherwise to enable the
successor
service to service the Mortgage Loans in accordance with this
Agreement or the
related Servicing Agreement) are not fully and timely reimbursed
by the Company
or the terminated Servicer, the Master Servicer shall be
entitled to
reimbursement of such costs and expenses from the Master
Servicer Collection
Account.
(d) The Master Servicer shall require the Company and the
related Servicer to comply with the remittance requirements and
other
obligations set forth in this Agreement or the related Servicing
Agreement, as
applicable.
(e) If the Master Servicer acts as a servicer, it will
not assume liability for the representations and warranties of
the Company or
the related Servicer, if any, that it replaces.
Section 4.04 FIDELITY BOND.
The Master Servicer, at its expense, shall maintain in effect a
blanket
fidelity bond and an errors and omissions insurance policy,
affording coverage
with respect to all directors, officers, employees and other
Persons acting on
such Master Servicer's behalf, and covering errors and omissions
in the
performance of the Master Servicer's obligations hereunder. The
errors and
omissions insurance policy and the fidelity bond shall be in
such form and
amount generally acceptable for entities serving as master
servicers or
trustees.
Section 4.05 POWER TO ACT; PROCEDURES. The Master Servicer shall
master
service the Mortgage Loans and shall have full power and
authority, subject to
the REMIC Provisions and the provisions of Article XI hereof, to
do any and all
things that it may deem necessary or desirable in connection
with the master
servicing and administration of the Mortgage Loans, including
but not limited to
the power and authority (i) to execute and deliver, on behalf of
the
Certificateholders and the Trustee, customary consents or
waivers and other
instruments and documents, (ii) to consent to transfers of any
Mortgaged
Property and assumptions of the Mortgage Notes and related
Mortgages, (iii) to
collect any Insurance Proceeds and Liquidation
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Proceeds, and (iv) to effectuate foreclosure or other conversion
of the
ownership of the Mortgaged Property securing any Mortgage Loan,
in each case, in
accordance with the provisions of this Agreement and the related
Servicing
Agreement, as applicable; provided, however, that the Master
Servicer shall not
(and, consistent with its responsibilities under Section 4.03,
shall not permit
the Company or the related Servicer to) knowingly or
intentionally take any
action, or fail to take (or fail to cause to be taken) any
action reasonably
within its control and the scope of duties more specifically set
forth herein,
that, under the REMIC Provisions, if taken or not taken, as the
case may be,
would cause REMIC I or REMIC II to fail to qualify as a REMIC or
result in the
imposition of a tax upon the Trust Fund (including but not
limited to the tax on
prohibited transactions as defined in Section 860F(a)(2) of the
Code and the tax
on contributions to a REMIC set forth in Section 860G(d) of the
Code) unless the
Master Servicer has received an Opinion of Counsel (but not at
the expense of
the Master Servicer) to the effect that the contemplated action
will not would
cause REMIC I or REMIC II to fail to qualify as a REMIC or
result in the
imposition of a tax upon REMIC I or REMIC II, as the case may
be. The Trustee
shall furnish the Master Servicer, upon written request from a
Servicing
Officer, with any powers of attorney empowering the Master
Servicer, the Company
or the related Servicer to execute and deliver instruments of
satisfaction or
cancellation, or of partial or full release or discharge, and to
foreclose upon
or otherwise liquidate Mortgaged Property, and to appeal,
prosecute or defend in
any court action relating to the Mortgage Loans or the Mortgaged
Property, in
accordance with the related Servicing Agreement and this
Agreement, and the
Trustee shall execute and deliver such other documents, as the
Master Servicer
may request, to enable the Master Servicer to master service and
administer the
Mortgage Loans and carry out its duties hereunder, in each case
in accordance
with Accepted Master Servicing Practices (and the Trustee shall
have no
liability for misuse of any such powers of attorney by the
Master Servicer, the
Company or the related Servicer). If the Master Servicer or the
Trustee has been
advised that it is likely that the laws of the state in which
action is to be
taken prohibit such action if taken in the name of the Trustee
or that the
Trustee would be adversely affected under the "doing business"
or tax laws of
such state if such action is taken in its name, the Master
Servicer shall join
with the Trustee in the appointment of a co-trustee pursuant to
Section 10.11
hereof. In the performance of its duties hereunder, the Master
Servicer shall be
an independent contractor and shall not, except in those
instances where it is
taking action in the name of the Trustee, be deemed to be the
agent of the
Trustee.
Section 4.06 DUE-ON-SALE CLAUSES; ASSUMPTION AGREEMENTS. To the
extent
provided in this Agreement or the related Servicing Agreement,
to the extent
Mortgage Loans contain enforceable due-on-sale clauses, the
Master Servicer
shall cause the Company and the related Servicer to enforce such
clauses in
accordance with this Agreement or the related Servicing
Agreement. If applicable
law prohibits the enforcement of a due-on-sale clause or such
clause is
otherwise not enforced in accordance with this Agreement or the
related
Servicing Agreement, and, as a consequence, a Mortgage Loan is
assumed, the
original Mortgagor may be released from liability in accordance
with this
Agreement or the related Servicing Agreement.
Section 4.07 RELEASE OF MORTGAGE FILES. (a) Upon becoming aware
of the
payment in full of any Mortgage Loan, or the receipt by the
Company or the
related Servicer of a notification that payment in full has been
escrowed in a
manner customary for such purposes for payment to
Certificateholders on the next
Distribution Date, the Company or the related Servicer will,
if
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required under the related Servicing Agreement (or if the
Company or the related
Servicer does not, the Master Servicer may), promptly furnish to
the Custodian,
on behalf of the Trustee, two copies of a certification
substantially in the
form of Exhibit G hereto signed by a Servicing Officer or in a
mutually
agreeable electronic format which will, in lieu of a signature
on its face,
originate from a Servicing Officer (which certification shall
include a
statement to the effect that all amounts received in connection
with such
payment that are required to be deposited in the Protected
Account maintained by
the Company or the Servicer pursuant to Article V or by the
related Servicer
pursuant to the related Servicing Agreement have been or will be
so deposited)
and shall request that the Custodian, on behalf of the Trustee,
deliver to the
Company or the related Servicer the related Mortgage File. Upon
receipt of such
certification and request, the Custodian, on behalf of the
Trustee, shall
promptly release the related Mortgage File to the Company or the
related
Servicer and the Trustee and Custodian shall have no further
responsibility with
regard to such Mortgage File. Upon any such payment in full, the
Company or the
related Servicer is authorized, to give, as agent for the
Trustee, as the
mortgagee under the Mortgage that secured the Mortgage Loan, an
instrument of
satisfaction (or assignment of mortgage without recourse,
representation or
warranty) regarding the Mortgaged Property subject to the
Mortgage, which
instrument of satisfaction or assignment, as the case may be,
shall be delivered
to the Person or Persons entitled thereto against receipt
therefor of such
payment, it being understood and agreed that no expenses
incurred in connection
with such instrument of satisfaction or assignment, as the case
may be, shall be
chargeable to the Protected Account.
(b) From time to time and as appropriate for the
servicing or foreclosure of any Mortgage Loan and in accordance
with this
Agreement or the related Servicing Agreement, the Trustee shall
execute such
documents as shall be prepared and furnished to the Trustee by
the Company, the
related Servicer or the Master Servicer (in form reasonably
acceptable to the
Trustee) and as are necessary to the prosecution of any such
proceedings. The
Custodian, on behalf of the Trustee, shall, upon the request of
the Company, the
related Servicer or the Master Servicer, and delivery to the
Custodian, on
behalf of the Trustee, of two copies of a request for release
signed by a
Servicing Officer substantially in the form of Exhibit G (or in
a mutually
agreeable electronic format which will, in lieu of a signature
on its face,
originate from a Servicing Officer), release the related
Mortgage File held in
its possession or control to the Company, the related Servicer
or the Master
Servicer, as applicable. Such trust receipt shall obligate the
Company, the
related Servicer or the Master Servicer to return the Mortgage
File to the
Custodian on behalf of the Trustee, when the need therefor by
such Person no
longer exists unless the Mortgage Loan shall be liquidated, in
which case, upon
receipt of a certificate of a Servicing Officer similar to that
hereinabove
specified, the Mortgage File shall be released by the Custodian,
on behalf of
the Trustee, to the Company, the related Servicer or the Master
Servicer.
Section 4.08 DOCUMENTS, RECORDS AND FUNDS IN POSSESSION OF
MASTER
SERVICER, COMPANY AND SERVICER TO BE HELD FOR TRUSTEE.
(a) The Master Servicer shall transmit and the Company or
the related Servicer (to the extent required by this Agreement
or the related
Servicing Agreement) shall transmit to the Trustee or Custodian
such documents
and instruments coming into the possession of such Person from
time to time as
are required by the terms hereof, or in the case of the
related
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Servicer, the related Servicing Agreement, to be delivered to
the Trustee or
Custodian. Any funds received by the Master Servicer, the
Company or by the
related Servicer in respect of any Mortgage Loan or which
otherwise are
collected by the Master Servicer, the Company or by the related
Servicer as
Liquidation Proceeds or Insurance Proceeds in respect of any
Mortgage Loan shall
be held for the benefit of the Trustee and the
Certificateholders subject to the
Master Servicer's right to retain or withdraw from the Master
Servicer
Collection Account, the Master Servicing Compensation and other
amounts provided
in this Agreement, and to the right of the Company and the
related Servicer to
retain its Servicing Fee and other amounts as provided in this
Agreement or the
related Servicing Agreement. The Master Servicer shall, and (to
the extent
provided in this Agreement or the related Servicing Agreement)
shall cause the
Company and the related Servicer to, provide access to
information and
documentation regarding the Mortgage Loans to the Trustee, its
agents and
accountants at any time upon reasonable request and during
normal business
hours, and to Certificateholders that are savings and loan
associations, banks
or insurance companies, the Office of Thrift Supervision, the
FDIC and the
supervisory agents and examiners of such Office and Corporation
or examiners of
any other federal or state banking or insurance regulatory
authority if so
required by applicable regulations of the Office of Thrift
Supervision or other
regulatory authority, such access to be afforded without charge
but only upon
reasonable request in writing and during normal business hours
at the offices of
the Master Servicer designated by it. In fulfilling such a
request the Master
Servicer shall not be responsible for determining the
sufficiency of such
information.
(b) All Mortgage Files and funds collected or held by, or
under the control of, the Master Servicer, in respect of any
Mortgage Loans,
whether from the collection of principal and interest payments
or from
Liquidation Proceeds or Insurance Proceeds, shall be held by the
Master Servicer
for and on behalf of the Trustee and the Certificateholders and
shall be and
remain the sole and exclusive property of the Trustee; provided,
however, that
the Master Servicer, the Company and the related Servicer shall
be entitled to
setoff against, and deduct from, any such funds any amounts that
are properly
due and payable to the Master Servicer or such Servicer under
this Agreement or
the related Servicing Agreement.
Section 4.09 STANDARD HAZARD INSURANCE AND FLOOD INSURANCE
POLICIES.
(a) For each Mortgage Loan, the Master Servicer shall
enforce any obligation of the Company and the related Servicer
under this
Agreement or the related Servicing Agreement to maintain or
cause to be
maintained standard fire and casualty insurance and, where
applicable, flood
insurance, all in accordance with the provisions of this
Agreement or the
related Servicing Agreement. It is understood and agreed that
such insurance
shall be with insurers meeting the eligibility requirements set
forth in this
Agreement and the related Servicing Agreement and that no
earthquake or other
additional insurance is to be required of any Mortgagor or to be
maintained on
property acquired in respect of a defaulted loan, other than
pursuant to such
applicable laws and regulations as shall at any time be in force
and as shall
require such additional insurance.
(b) Pursuant to Sections 5.01, 5.04 and 5.05 any amounts
collected by the Company, the Servicers or the Master Servicer,
or by the
Company or the Servicers, under any insurance policies (other
than amounts to be
applied to the restoration or repair of the property
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subject to the related Mortgage or released to the Mortgagor in
accordance with
this Agreement or the Servicing Agreements) shall be deposited
by the Company in
its Protected Account or by the related Servicer or the Master
Servicer into the
Master Servicer Collection Account, subject to withdrawal
pursuant to Sections
5.02, 5.04, 5.05 and 5.07, as applicable. Any cost incurred by
the Master
Servicer, the Company or the related Servicer in maintaining any
such insurance
if the Mortgagor defaults in its obligation to do so shall be
added to the
amount owing under the Mortgage Loan where the terms of the
Mortgage Loan so
permit; provided, however, that the addition of any such cost
shall not be taken
into account for purposes of calculating the distributions to be
made to
Certificateholders and shall be recoverable by the Master
Servicer, the Company
or the related Servicer pursuant to Sections 5.02, 5.04, 5.05
and 5.07, as
applicable.
Section 4.10 PRESENTMENT OF CLAIMS AND COLLECTION OF
PROCEEDS.
The Master Servicer shall (to the extent provided in this
Agreement and
the related Servicing Agreement) cause the Company or the
Servicer to, prepare
and present on behalf of the Trustee and the Certificateholders
all claims under
the Insurance Policies and take such actions (including the
negotiation,
settlement, compromise or enforcement of the insured's claim) as
shall be
necessary to realize recovery under such policies. Any proceeds
disbursed to the
Master Servicer (or disbursed to the Company or the related
Servicer and
remitted to the Master Servicer) in respect of such policies,
bonds or contracts
shall be promptly deposited in the Master Servicer Collection
Account upon
receipt, except that any amounts realized that are to be applied
to the repair
or restoration of the related Mortgaged Property as a condition
precedent to the
presentation of claims on the related Mortgage Loan to the
insurer under any
applicable Insurance Policy need not be so deposited (or
remitted).
Section 4.11 MAINTENANCE OF THE PRIMARY MORTGAGE INSURANCE
POLICIES.
(a) The Master Servicer shall not take, or permit the
Company or the related Servicer (to the extent such action is
prohibited under
this Agreement or the related Servicing Agreement) to take, any
action that
would result in noncoverage under any applicable Primary
Mortgage Insurance
Policy of any loss which, but for the actions of the Master
Servicer, the
Company or the related Servicer, would have been covered
thereunder. The Master
Servicer shall use its best reasonable efforts to cause the
Company and the
related Servicer (to the extent required under this Agreement
and the related
Servicing Agreement) to keep in force and effect (to the extent
that the
Mortgage Loan requires the Mortgagor to maintain such
insurance), primary
mortgage insurance applicable to each Mortgage Loan (including
any LPMI Policy)
in accordance with the provisions of this Agreement and the
related Servicing
Agreement, as applicable. The Master Servicer shall not, and
shall not permit
the Company or the related Servicer (to the extent required
under this Agreement
or the related Servicing Agreement) to, cancel or refuse to
renew any such
Primary Mortgage Insurance Policy that is in effect at the date
of the initial
issuance of the Mortgage Note and is required to be kept in
force hereunder
except in accordance with the provisions of this Agreement and
the related
Servicing Agreement, as applicable.
(b) The Master Servicer agrees to cause the Company and
the related Servicer (to the extent required under this
Agreement and the
related Servicing Agreement) to present, on
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behalf of the Trustee and the Certificateholders, claims to the
insurer under
any Primary Mortgage Insurance Policies and, in this regard, to
take such
reasonable action as shall be necessary to permit recovery under
any Primary
Mortgage Insurance Policies respecting defaulted Mortgage Loans.
Pursuant to
Sections 5.01, 5.04 and 5.05, any amounts collected by the
Company or the
related Servicer under any Primary Mortgage Insurance Policies
shall be
deposited by the Company in its Protected Account or by the
related Servicer in
the Master Servicer Collection Account, subject to withdrawal
pursuant to
Section 5.04 or 5.05, as applicable.
Section 4.12 TRUSTEE TO RETAIN POSSESSION OF CERTAIN INSURANCE
POLICIES
AND DOCUMENTS.
The Trustee (or the Custodian, as directed by the Trustee),
shall
retain possession and custody of the originals (to the extent
available) of any
Primary Mortgage Insurance Policies, or certificate of insurance
if applicable,
and any certificates of renewal as to the foregoing as may be
issued from time
to time as contemplated by this Agreement. Until all amounts
distributable in
respect of the Certificates have been distributed in full and
the Master
Servicer otherwise has fulfilled its obligations under this
Agreement, the
Trustee (or its Custodian, if any, as directed by the Trustee)
shall also retain
possession and custody of each Mortgage File in accordance with
and subject to
the terms and conditions of this Agreement. The Master Servicer
shall promptly
deliver or cause to be delivered to the Trustee (or the
Custodian, as directed
by the Trustee), upon the execution or receipt thereof the
originals of any
Primary Mortgage Insurance Policies, any certificates of
renewal, and such other
documents or instruments that constitute portions of the
Mortgage File that come
into the possession of the Master Servicer from time to
time.
Section 4.13 REALIZATION UPON DEFAULTED MORTGAGE LOANS.
The Master Servicer shall cause the Company and the related
Servicer
(to the extent required under this Agreement and the related
Servicing
Agreement) to foreclose upon, repossess or otherwise comparably
convert the
ownership of Mortgaged Properties securing such of the Mortgage
Loans as come
into and continue in default and as to which no satisfactory
arrangements can be
made for collection of delinquent payments, all in accordance
with this
Agreement or the related Servicing Agreement.
Section 4.14 COMPENSATION FOR THE MASTER SERVICER.
The Master Servicer shall be entitled to the Master Servicing
Fee on
each Distribution Date as compensation for the performance of
its obligations
hereunder. In addition, the Master Servicer shall be entitled to
(i) all income
and gain realized from any investment of funds on Permitted
Investments in the
Master Servicer Collection Account and Distribution Account as
compensation for
the performance of its obligations hereunder and (ii) any
interest remitted by
the related Servicer in connection with a Principal Prepayment
in full or
otherwise in excess of amounts required to be remitted to the
Master Servicer
Collection Account ("Additional Master Servicering
Compensation"). The Master
Servicer shall be required to pay all expenses incurred by it in
connection with
its activities hereunder and shall not be entitled to
reimbursement therefor
except as provided in this Agreement.
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Section 4.15 REO PROPERTY.
(a) In the event the Trust Fund acquires ownership of any
REO Property in respect of any related Mortgage Loan, the deed
or certificate of
sale shall be issued to the Trustee, or to its nominee, on
behalf of the related
Certificateholders. The Master Servicer shall, to the extent
provided in this
Agreement or the related Servicing Agreement, cause the Company
or the related
Servicer to sell, any REO Property as expeditiously as possible
and in
accordance with the provisions of this Agreement and the related
Servicing
Agreement, as applicable. Pursuant to its efforts to sell such
REO Property, the
Master Servicer shall cause the Company or the related Servicer
to protect and
conserve, such REO Property in the manner and to the extent
required by this
Agreement or the related Servicing Agreement, in accordance with
the REMIC
Provisions and in a manner that does not result in a tax on "net
income from
foreclosure property" or cause such REO Property to fail to
qualify as
"foreclosure property" within the meaning of Section 860G(a)(8)
of the Code.
(b) The Master Servicer shall, to the extent required by
this Agreement or the related Servicing Agreement, cause the
Company or the
related Servicer to deposit all funds collected and received in
connection with
the operation of any REO Property in the Protected Account.
(c) The Master Servicer and the Company or the related
Servicer, upon the final disposition of any REO Property, shall
be entitled to
reimbursement for any related unreimbursed Advances and other
unreimbursed
advances as well as any unpaid Master Servicing Fees and
Servicing Fees from
Liquidation Proceeds received in connection with the final
disposition of such
REO Property; provided, that any such unreimbursed Monthly
Advances as well as
any unpaid Master Servicing Fees and Servicing Fees may be
reimbursed or paid,
as the case may be, prior to final disposition, out of any net
rental income or
other net amounts derived from such REO Property.
(d) To the extent provided in this Agreement or the
related Servicing Agreement, the Liquidation Proceeds from the
final disposition
of the REO Property, net of any payment to the Master Servicer
and the Company
or the related Servicer as provided above shall be deposited in
the Protected
Account on or prior to the Determination Date in the month
following receipt
thereof and be remitted by wire transfer in immediately
available funds to the
Master Servicer for deposit into the related Master Servicer
Collection Account
on the next succeeding Remittance Date.
Section 4.16 ANNUAL OFFICER'S CERTIFICATE AS TO COMPLIANCE.
(a) The Master Servicer shall deliver to the Securities
Administrator, the Trustee and the Rating Agencies on or before
March 1 of each
year, commencing on March 1, 2006, an Officer's Certificate,
certifying that
with respect to the period ending December 31 of the prior year:
(i) such
Servicing Officer has reviewed the activities of such Master
Servicer during the
preceding calendar year or portion thereof and its performance
under this
Agreement, (ii) to the best of such Servicing Officer's
knowledge, based on such
review, such Master Servicer has performed and fulfilled its
duties,
responsibilities and obligations under this
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Agreement in all material respects throughout such year, or, if
there has been a
default in the fulfillment of any such duties, responsibilities
or obligations,
specifying each such default known to such Servicing Officer and
the nature and
status thereof, (iii) nothing has come to the attention of such
Servicing
Officer to lead such Servicing Officer to believe that the
Company or any
Servicer has failed to perform any of its duties,
responsibilities and
obligations under this Agreement or the related Servicing
Agreement in all
material respects throughout such year, or, if there has been a
material default
in the performance or fulfillment of any such duties,
responsibilities or
obligations, specifying each such default known to such
Servicing Officer and
the nature and status thereof.
(b) Copies of such statements shall be provided to any
Certificateholder upon request, by the Master Servicer or by the
Trustee at the
Master Servicer's expense if the Master Servicer failed to
provide such copies
(unless (i) the Master Servicer shall have failed to provide the
Trustee with
such statement or (ii) the Trustee shall be unaware of the
Master Servicer's
failure to provide such statement).
Section 4.17 ANNUAL INDEPENDENT ACCOUNTANT'S SERVICING REPORT.
If the
Master Servicer has, during the course of any fiscal year,
directly serviced any
of the Mortgage Loans, then the Master Servicer at its expense
shall cause a
nationally recognized firm of independent certified public
accountants to
furnish a statement to the Securities Administrator, the
Trustee, the Rating
Agencies and the Seller on or before March 1 of each year,
commencing on March
1, 2006 to the effect that, with respect to the most recently
ended fiscal year,
such firm has examined certain records and documents relating to
the Master
Servicer's performance of its servicing obligations under this
Agreement and
pooling and servicing and trust agreements in material respects
similar to this
Agreement and to each other and that, on the basis of such
examination conducted
substantially in compliance with the audit program for mortgages
serviced for
Freddie Mac or the Uniform Single Attestation Program for
Mortgage Bankers, such
firm is of the opinion that the Master Servicer's activities
have been conducted
in compliance with this Agreement, or that such examination has
disclosed no
material items of noncompliance except for (i) such exceptions
as such firm
believes to be immaterial, (ii) such other exceptions as are set
forth in such
statement and (iii) such exceptions that the Uniform Single
Attestation Program
for Mortgage Bankers or the Audit Program for Mortgages Serviced
by Freddie Mac
requires it to report. Copies of such statements shall be
provided to any
Certificateholder upon request by the Master Servicer, or by the
Trustee at the
expense of the Master Servicer if the Master Servicer shall fail
to provide such
copies (unless (i) the Master Servicer shall have failed to
provide the Trustee
with such statement or (ii) the Trustee shall be unaware of the
Master
Servicer's failure to provide such statement). If such report
discloses
exceptions that are material, the Master Servicer shall advise
the Trustee
whether such exceptions have been or are susceptible of cure,
and will take
prompt action to do so.
Section 4.18 REPORTS FILED WITH SECURITIES AND EXCHANGE
COMMISSION.
Within 15 days after each Distribution Date, the Securities
Administrator shall,
in accordance with industry standards, file with the Commission
via the
Electronic Data Gathering and Retrieval System ("EDGAR"), a Form
8-K (or other
comparable Form containing the same or comparable information or
other
information mutually agreed upon) with a copy of the statement
to the Trustee
who shall make available a copy of the monthly statement to
the
Certificateholders for
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such Distribution Date as an exhibit thereto. Prior to January
30 in each year,
the Securities Administrator shall, in accordance with industry
standards and
only if instructed by the Depositor, file a Form 15 Suspension
Notice with
respect to the Trust Fund, if applicable. Prior to (i) March 15,
2006 and (ii)
unless and until a Form 15 Suspension Notice shall have been
filed, prior to
March 15 of each year thereafter, the Master Servicer shall
provide the
Securities Administrator with a Master Servicer Certification,
together with a
copy of the annual independent accountant's servicing report and
annual
statement of compliance of the Company to be delivered pursuant
to this
Agreement and each Servicer, in each case, required to be
delivered pursuant to
the related Servicing Agreement, and, if applicable, the annual
independent
accountant's servicing report and annual statement of compliance
to be delivered
by the Master Servicer pursuant to Sections 4.16 and 4.17. Prior
to (i) March
31, 2006 and (ii) unless and until a Form 15 Suspension Notice
shall have been
filed, March 31 of each year thereafter, the Securities
Administrator shall file
a Form 10-K, in substance conforming to industry standards, with
respect to the
Trust. Such Form 10-K shall include the Master Servicer
Certification and other
documentation provided by the Master Servicer pursuant to the
second preceding
sentence. The Depositor hereby grants to the Securities
Administrator a limited
power of attorney to execute and file each such document on
behalf of the
Depositor. Such power of attorney shall continue until either
the earlier of (i)
receipt by the Securities Administrator from the Depositor of
written
termination of such power of attorney and (ii) the termination
of the Trust
Fund. The Depositor agrees to promptly furnish to the Securities
Administrator,
from time to time upon request, such further information,
reports and financial
statements within its control related to this Agreement, the
Mortgage Loans as
the Securities Administrator reasonably deems appropriate to
prepare and file
all necessary reports with the Commission. The Securities
Administrator shall
have no responsibility to file any items other than those
specified in this
Section 4.18; provided, however, the Securities Administrator
will cooperate
with the Depositor in connection with any additional filings
with respect to the
Trust Fund as the Depositor deems necessary under the Securities
Exchange Act of
1934, as amended (the "Exchange Act"). Copies of all reports
filed by the
Securities Administrator under the Exchange Act shall be sent
to: the Depositor
c/o Bear, Stearns & Co. Inc., Attn: Managing
Director-Analysis and Control, One
Metrotech Center North, Brooklyn, New York 11202-3859. Fees and
expenses
incurred by the Securities Administrator in connection with this
Section 4.18
shall not be reimbursable from the Trust Fund.
Section 4.19 UCC. The Trustee agrees to file continuation
statements
for any Uniform Commercial Code financing statements which the
Seller has
informed the Trustee were filed on the Closing Date in
connection with the
Trust. The Seller shall file any financing statements or
amendments thereto
required by any change in the Uniform Commercial Code.
Section 4.20 OPTIONAL PURCHASE OF CERTAIN MORTGAGE LOANS.
With respect to any Mortgage Loans which as of the first day of
a
Fiscal Quarter is delinquent in payment by 90 days or more or is
an REO
Property, EMC shall have the right to purchase any Mortgage Loan
from the Trust
which becomes 90 days or more delinquent or becomes an REO
Property at a price
equal to the Repurchase Price; provided however (i) that such
Mortgage Loan is
still 90 days or more delinquent or is an REO Property as of the
date of such
purchase and (ii) this purchase option, if not theretofore
exercised, shall
terminate on the
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date prior to the last day of the related Fiscal Quarter. This
purchase option,
if not exercised, shall not be thereafter reinstated unless the
delinquency is
cured and the Mortgage Loan thereafter again becomes 90 days or
more delinquent
or becomes an REO Property, in which case the option shall again
become
exercisable as of the first day of the related Fiscal
Quarter.
In addition, EMC shall, at its option, purchase any Mortgage
Loan from
the Trust if the first Due Date for such Mortgage Loan is
subsequent to the
Cut-off Date and the initial Monthly Payment is not made within
thirty (30) days
of such Due Date. Such purchase shall be made at a price equal
to the Repurchase
Price.
If at any time EMC remits to the Master Servicer a payment for
deposit
in the Master Servicer Collection Account covering the amount of
the Repurchase
Price for such a Mortgage Loan, and EMC provides to the Trustee
a certification
signed by a Servicing Officer stating that the amount of such
payment has been
deposited in the Master Servicer Collection Account, then the
Trustee shall
execute the assignment of such Mortgage Loan prepared and
delivered to the
Trustee, at the request of EMC, without recourse, representation
or warranty, to
EMC which shall succeed to all the Trustee's right, title and
interest in and to
such Mortgage Loan, and all security and documents relative
thereto. Such
assignment shall be an assignment outright and not for security.
EMC will
thereupon own such Mortgage, and all such security and
documents, free of any
further obligation to the Trustee or the Certificateholders with
respect
thereto.
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ARTICLE V
ACCOUNTS
Section 5.01 COLLECTION OF MORTGAGE LOAN PAYMENTS; PROTECTED
ACCOUNT.
(a) The Company shall make reasonable efforts in
accordance with customary and usual standards of practice of
prudent mortgage
lenders in the respective states in which the Mortgaged
Properties related to
the EMC Mortgage Loans are located to collect all payments
called for under the
terms and provisions of the EMC Mortgage Loans to the extent
such procedures
shall be consistent with this Agreement and the terms and
provisions of any
related Required Insurance Policy. Consistent with the
foregoing, the Company
may in its discretion (i) waive any late payment charge and (ii)
extend the due
dates for payments due on a Mortgage Note related to an EMC
Mortgage Loan for a
period not greater than 125 days. In the event of any such
arrangement, the
Company shall make Advances on the related EMC Mortgage Loan
during the
scheduled period in accordance with the amortization schedule of
such EMC
Mortgage Loan without modification thereof by reason of such
arrangements, and
shall be entitled to reimbursement therefor in accordance with
Section 6.01. The
Company shall not be required to institute or join in litigation
with respect to
collection of any payment (whether under a Mortgage, Mortgage
Note or otherwise
or against any public or governmental authority with respect to
a taking or
condemnation) if it reasonably believes that enforcing the
provision of the
Mortgage or other instrument pursuant to which such payment is
required is
prohibited by applicable law. In addition, if (x) an EMC
Mortgage Loan is in
default or default is imminent or (y) the Company delivers to
the Trustee a
certification addressed to the Trustee, based on the advice of
counsel or
certified public accountants, in either case, that have a
national reputation
with respect to taxation of REMICs, that a modification of such
EMC Mortgage
Loan will not result in the imposition of taxes on or disqualify
any of REMIC I
or REMIC II, the Company may, (A) amend the related Mortgage
Note to reduce the
Mortgage Rate applicable thereto, provided that such reduced
Mortgage Rate shall
in no event be lower than 5.00% with respect to any EMC Mortgage
Loan and (B)
amend any Mortgage Note related to an EMC Mortgage Loan to
extend to the
maturity thereof.
In accordance with the standards of the first paragraph of
Section
3.01, the Company shall not waive (or permit a sub-servicer to
waive) any
Prepayment Charge related to an EMC Mortgage Loan unless: (i)
the enforceability
thereof shall have been limited by bankruptcy, insolvency,
moratorium,
receivership and other similar laws relating to creditors'
rights generally,
(ii) the enforcement thereof is illegal, or any local, state or
federal agency
has threatened legal action if the prepayment penalty is
enforced, (iii) the
collectability thereof shall have been limited due to
acceleration in connection
with a foreclosure or other involuntary payment or (iv) such
waiver is standard
and customary in servicing similar Mortgage Loans and relates to
a default or a
reasonably foreseeable default and would, in the reasonable
judgment of the
Company, maximize recovery of total proceeds taking into account
the value of
such Prepayment Charge and the related EMC Mortgage Loan. If a
Prepayment Charge
is waived, but does not meet the standards described above, then
the Company is
required to pay the amount of such waived Prepayment Charge, for
the benefit of
the Class P Certificates, by remitting such amount to the Master
Servicer by the
Remittance Date.
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(b) The Company shall establish and maintain a Protected
Account (which shall at all times be an Eligible Account) with a
depository
institution in the name of the Company for the benefit of the
Trustee on behalf
of the Certificateholders and designated "U.S. Bank National
Association, in
trust for registered holders of Bear Stearns Asset Backed
Securities I LLC,
Asset-Backed Certificates Series 2005-AC1". The Company shall
deposit or cause
to be deposited into the Protected Account on a daily basis
within one Business
Day of receipt, except as otherwise specifically provided
herein, the following
payments and collections remitted by subservicers or received by
it in respect
of the EMC Mortgage Loans subsequent to the Cut-off Date (other
than in respect
of principal and interest due on the EMC Mortgage Loans on or
before the Cut-off
Date) and the following amounts required to be deposited
hereunder:
(i) all payments on account of principal, including
Principal Prepayments, on the EMC Mortgage Loans;
(ii) all payments on account of interest on the EMC
Mortgage Loans net of the related Servicing Fee permitted under
Section
3.10 and LPMI Fees, if any;
(iii) all Liquidation Proceeds and Insurance Proceeds with
respect to any EMC Mortgage Loans, other than proceeds to be
applied to
the restoration or repair of the Mortgaged Property or released
to the
Mortgagor in accordance with the Company's normal servicing
procedures;
(iv) any amount required to be deposited by the Company
pursuant to Section 5.01(c) in connection with any losses on
Permitted
Investments;
(v) any amounts required to be deposited by the Company
pursuant to Section 3.05;
(vi) any Prepayment Charges collected on the EMC Mortgage
Loans; and
(vii) any other amounts required to be deposited hereunder.
The foregoing requirements for remittance by the Company into
the
Protected Account shall be exclusive, it being understood and
agreed that,
without limiting the generality of the foregoing, payments in
the nature of late
payment charges or assumption fees, if collected, need not be
remitted by the
Company. In the event that the Company shall remit any amount
not required to be
remitted and not otherwise subject to withdrawal pursuant to
Section 5.02, it
may at any time withdraw or direct the institution maintaining
the Protected
Account, to withdraw such amount from the Protected Account, any
provision
herein to the contrary notwithstanding. Such withdrawal or
direction may be
accomplished by delivering written notice thereof to the
institution maintaining
the Protected Account, that describes the amounts deposited in
error in the
Protected Account. The Company shall maintain adequate records
with respect to
all withdrawals made pursuant to this Section. All funds
deposited in the
Protected Account shall be held in trust for the
Certificateholders until
withdrawn in accordance with Section 5.02.
(c) The institution that maintains the Protected Account
shall invest the funds in the Protected Account, in the manner
directed by the
Company, in Permitted Investments
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which shall mature not later than the Remittance Date and shall
not be sold or
disposed of prior to its maturity. All such Permitted
Investments shall be made
in the name of the Trustee, for the benefit of the
Certificateholders. All
income and gain net of any losses realized from any such
investment shall be for
the benefit of the Company as servicing compensation and shall
be remitted to it
monthly as provided herein. The amount of any losses incurred in
the Protected
Account in respect of any such investments shall be deposited by
the Company
into the Protected Account, out of the Company's own funds.
(d) The Company shall give at least 30 days advance
notice to the Trustee, the Seller, the Master Servicer, each
Rating Agency and
the Depositor of any proposed change of location of the
Protected Account prior
to any change thereof.
Section 5.02 PERMITTED WITHDRAWALS FROM THE PROTECTED
ACCOUNT.
(a) The Company may from time to time make withdrawals
from the Protected Account for the following purposes:
(i) to pay itself (to the extent not previously paid to
or withheld by the Company), as servicing compensation in
accordance
with Section 3.10, that portion of any payment of interest that
equals
the Servicing Fee for the period with respect to which such
interest
payment was made, and, as additional servicing compensation,
those
other amounts set forth in Section 3.10;
(ii) to reimburse the Company for Advances made by it with
respect to the Mortgage Loans, provided, however, that the
Company's
right of reimbursement pursuant to this subclause (ii) shall be
limited
to amounts received on particular EMC Mortgage Loan(s)
(including, for
this purpose, Liquidation Proceeds and Insurance Proceeds)
that
represent late recoveries of payments of principal and/or
interest on
such particular EMC Mortgage Loan(s) in respect of which any
such
Advance was made;
(iii) to reimburse the Company for any previously made
portion of a Servicing Advance or an Advance made by the Company
that,
in the good faith judgment of the Company, will not be
ultimately
recoverable by it from the related Mortgagor, any related
Liquidation
Proceeds, Insurance Proceeds or otherwise (a "Nonrecoverable
Advance"),
to the extent not reimbursed pursuant to clause (ii) or clause
(v);
(iv) to reimburse the Company from Insurance Proceeds for
Insured Expenses covered by the related Insurance Policy;
(v) to pay the Company any unpaid Servicing Fees and to
reimburse it for any unreimbursed Servicing Advances,
provided,
however, that the Company's right to reimbursement for
Servicing
Advances pursuant to this subclause (v) with respect to any
EMC
Mortgage Loan shall be limited to amounts received on particular
EMC
Mortgage Loan(s) (including, for this purpose, Liquidation
Proceeds,
Insurance Proceeds and purchase and repurchase proceeds) that
represent
late recoveries of the payments for which such Servicing
Advances were
made;
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(vi) to pay to the Seller, the Depositor or itself, as
applicable, with respect to each EMC Mortgage Loan or property
acquired
in respect thereof that has been purchased pursuant to Section
2.02,
2.03 or 4.20 of this Agreement, all amounts received thereon and
not
taken into account in determining the related Stated Principal
Balance
of such repurchased EMC Mortgage Loan;
(vii) to pay any expenses recoverable by the Company
pursuant to Section 8.04 of this Agreement;
(viii) to withdraw pursuant to Section 5.01 any amount
deposited in the Protected Account and not required to be
deposited
therein; and
(ix) to clear and terminate the Protected Account upon
termination of this Agreement pursuant to Section 11.01
hereof.
In addition, no later than 1:00 p.m. Eastern time on the
Remittance
Date, the Company shall withdraw from the Protected Account and
remit to the
Master Servicer the amount required to be withdrawn therefrom
pursuant to
Section 5.05 hereof. With respect to any remittance received by
the Master
Servicer from EMC after the date on which such remittance was
due, EMC shall pay
to the Master Servicer interest on any such late remittance at
an annual rate
equal to the prime rate announced to be in effect from time to
time as published
as the average rate in The Wall Street Journal (Northeast
Edition), plus two
percentage points, but in no event greater than the maximum
amount permitted by
applicable law. Such interest shall be deposited in EMC's
Protected Account by
EMC on the date such late payment is made and shall cover the
period commencing
with the day following the date on which such remittance was due
and ending with
the Business Day on which such remittance is made, both
inclusive. Such interest
shall be remitted along with the distribution payable on the
next succeeding
Remittance Date. The payment by EMC of any such interest shall
not be deemed an
extension of time for payment or a waiver of any Event of
Default with respect
to EMC.
The Company shall keep and maintain separate accounting, on a
Mortgage
Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from
the Protected Account pursuant to subclauses (i), (ii), (iv),
(v) and (vi)
above. Prior to making any withdrawal from the Protected Account
pursuant to
subclause (iii), the Company shall deliver to the Trustee an
Officer's
Certificate of a Servicing Officer indicating the amount of any
previous Advance
or Servicing Advance determined by the Company to be a
Nonrecoverable Advance
and identifying the related EMC Mortgage Loan(s), and their
respective portions
of such Nonrecoverable Advance.
Section 5.03 REPORTS TO MASTER SERVICER.
On or before the tenth calendar day of each month, the Company
shall
furnish to the Master Servicer electronically in a format
acceptable to the
Master Servicer loan accounting reports in the investor's
assigned loan number
order to document the payment activity on each EMC Mortgage Loan
on an
individual mortgage loan basis. With respect to each month, such
loan accounting
reports shall contain the following:
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(i) with respect to each Scheduled Payment (on both an
actual and scheduled basis with respect to mortgage loan
balances and
on an actual basis with respect to paid-through dates), the
amount of
such remittance allocable to principal (including a separate
breakdown
of any Principal Prepayment, including the amount of any
Prepayment
Interest Shortfall);
(ii) with respect to each Monthly Payment, the amount of
such remittance allocable to scheduled interest;
(iii) the amount of servicing compensation received by the
Company during the prior calendar month;
(iv) the aggregate scheduled principal balance of the EMC
Mortgage Loans;
(v) the aggregate amount of Advances made by the Company
pursuant to Section 6.01;
(vi) the aggregate of any expenses reimbursed to the
Company during the prior calender month pursuant to Section
5.02;
(vii) the number and aggregate outstanding principal
balances of EMC Mortgage Loans (a) delinquent (1) 30 to 59 days,
(2) 60
to 89 days, (3) 90 days or more; (b) as to which foreclosure
has
commenced; and (c) as to which REO Property has been acquired;
and
(viii) the amount of any Prepayment Charges collected by the
Company and the amount of Prepayment Charges paid by the Company
in
connection with a waiver that is not permitted under this
Agreement.
Section 5.04 COLLECTION OF TAXES; ASSESSMENTS AND SIMILAR ITEMS;
ESCROW
ACCOUNTS.
With respect to each EMC Mortgage Loan, to the extent required
by the
related Mortgage Note, the Company shall establish and maintain
one or more
accounts (each, an "Escrow Account") and deposit and retain
therein all
collections from the Mortgagors (or advances by the Company) for
the payment of
taxes, assessments, hazard insurance premiums or comparable
items for the
account of the Mortgagors. Nothing herein shall require the
Company to compel a
Mortgagor to establish an Escrow Account in violation of
applicable law.
Withdrawals of amounts so collected from the Escrow Accounts may
be
made only to effect timely payment of taxes, assessments, hazard
insurance
premiums, condominium or PUD association dues, or comparable
items, to reimburse
the Company out of related collections for any payments made
with respect to
each EMC Mortgage Loan pursuant to Section 3.01 (with respect to
taxes and
assessments and insurance premiums) and Section 3.05 (with
respect to hazard
insurance), to refund to any Mortgagors for any EMC Mortgage
Loans any sums as
may be determined to be overages, to pay interest, if required
by law or the
terms of the related Mortgage or Mortgage Note, to such
Mortgagors on balances
in the Escrow Account or to clear
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and terminate the Escrow Account at the termination of this
Agreement in
accordance with Section 11.01 thereof. The Escrow Account shall
not be a part of
the Trust Fund.
Section 5.05 SERVICER PROTECTED ACCOUNTS. (a) The Master
Servicer shall
enforce the obligation of the Company and the Servicers to
establish and
maintain a Protected Account in accordance with this Agreement
and the Servicing
Agreements, with records to be kept with respect thereto on a
Mortgage Loan by
Mortgage Loan basis, into which accounts shall be deposited
within one Business
Day (or as of such other time specified in the Servicing
Agreements) of receipt
all collections of principal and interest on any Mortgage Loan
and with respect
to any REO Property received by the Company or the related
Servicer, including
Principal Prepayments, Insurance Proceeds, Liquidation Proceeds,
and advances
made from the Company's or such Servicer's own funds (less
servicing
compensation as permitted by this Agreement or the related
Servicing Agreement)
and all other amounts to be deposited in the Protected Accounts.
Each of the
Company and the Servicers are hereby authorized to make
withdrawals from and
deposits to the related Protected Account for purposes required
or permitted by
this Agreement. To the extent provided in this Agreement or any
Servicing
Agreement, the Protected Account shall be held in a Designated
Depository
Institution and segregated on the books of such institution in
the name of the
Trustee for the benefit of Certificateholders.
(b) To the extent provided in this Agreement or any
Servicing Agreement, amounts on deposit in a Protected Account
may be invested
in Permitted Investments in the name of the Trustee for the
benefit of
Certificateholders and, except as provided in the preceding
paragraph, not
commingled with any other funds, such Permitted Investments to
mature, or to be
subject to redemption or withdrawal, no later than the date on
which such funds
are required to be withdrawn for deposit in the Master Servicer
Collection
Account, and shall be held until required for such deposit. The
income earned
from Permitted Investments made pursuant to this Section 5.04
shall be paid to
the Company or the related Servicer under this Agreement or the
related
Servicing Agreement, and the risk of loss of moneys required to
be distributed
to the Certificateholders resulting from such investments shall
be borne by and
be the risk of the Company or the related Servicer, as the case
may be. The
Company or the related Servicer (to the extent provided in this
Agreement or the
related Servicing Agreement) shall deposit the amount of any
such loss in the
Protected Account within two Business Days of receipt of
notification of such
loss but not later than the second Business Day prior to the
Distribution Date
on which the moneys so invested are required to be distributed
to the
Certificateholders.
(c) To the extent provided in this Agreement or the
related Servicing Agreement and subject to this Article V, on or
before each
Remittance Date, the Company or the related Servicer shall
withdraw or shall
cause to be withdrawn from its Protected Account and shall
immediately deposit
or cause to be deposited in the Master Servicer Collection
Account amounts
representing the following collections and payments (other than
with respect to
principal of or interest on the Mortgage Loans due on or before
the Cut-off
Date):
(i) Scheduled Payments on the Mortgage Loans received or
any related portion thereof advanced by the Company or the
related
Servicer pursuant to the related
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Servicing Agreement which were due on or before the related Due
Date,
net of the amount thereof comprising the Servicing Fees;
(ii) Full Principal Prepayments and any Liquidation
Proceeds received by the Company or the related Servicer with
respect
to such Mortgage Loans in the related Prepayment Period, with
interest
to the date of prepayment or liquidation, net of the amount
thereof
comprising the Servicing Fees and LPMI Fees, if any;
(iii) Partial Principal Prepayments received by the Company
or the related Servicer for such Mortgage Loans in the
related
Prepayment Period;
(iv) Any amount to be used as an Advance; and
(v) The amount of any Prepayment Charges collected with
respect to the Mortgage Loans and the amount of any Prepayment
Charges
paid by the Company or the related Servicer in connection with
the
waiver of a Prepayment Charge in a manner that is not permitted
under
this Agreement or the related Servicing Agreement.
(d) Withdrawals may be made from a Protected Account by
the Company as described in Section 5.02 hereof and by the
Master Servicer or
the related Servicer only to make remittances as provided in
Section 5.05(c),
5.06 and 5.07; to reimburse the Master Servicer or the Servicer
for Advances
which have been recovered by subsequent collection from the
related Mortgagor;
to remove amounts deposited in error; to remove fees, charges or
other such
amounts deposited on a temporary basis; or to clear and
terminate the account at
the termination of this Agreement in accordance with Section
11.01. As provided
in Sections 5.05(c) and 5.06(b) certain amounts otherwise due to
the related
Servicer may be retained by the related Servicer and need not be
deposited in
the Master Servicer Collection Account.
Section 5.06 MASTER SERVICER COLLECTION ACCOUNT. (a) The
Master
Servicer shall establish and maintain in the name of the
Trustee, for the
benefit of the Certificateholders, the Master Servicer
Collection Account which
shall be an Eligible Account. The Master Servicer will deposit
in the Master
Servicer Collection Account as identified by the Master Servicer
and as received
by the Master Servicer, the following amounts:
(i) Any Advance and any Compensating Interest Payments;
(ii) Any Insurance Proceeds, Liquidation Proceeds or
Subsequent Recoveries received by or on behalf of the Master
Servicer
or which were not deposited in a Protected Account;
(iii) The Repurchase Price with respect to any Mortgage
Loans purchased by the Seller or Section 2.02 or 2.03, any
amounts
which are to be treated pursuant to Section 2.04 of this
Agreement as
the payment of such a Repurchase Price, the Repurchase Price
with
respect to any Mortgage Loans purchased by EMC pursuant to
Section
4.20, and all proceeds of any Mortgage Loans or property
acquired with
respect thereto repurchased by the Seller or its designee
pursuant to
Section 11.01;
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(iv) Any amounts required to be deposited with respect to
losses on investments of deposits in an Account; and
(v) Any other amounts received by or on behalf of the
Master Servicer or the Trustee and required to be deposited in
the
Master Servicer Collection Account pursuant to this
Agreement.
(b) All amounts deposited to the Master Servicer
Collection Account shall be held by the Master Servicer in the
name of the
Trustee in trust for the benefit of the Certificateholders in
accordance with
the terms and provisions of this Agreement. The requirements for
crediting the
Master Servicer Collection Account or the Distribution Account
shall be
exclusive, it being understood and agreed that, without limiting
the generality
of the foregoing, payments in the nature of late payment charges
or assumption,
tax service, statement account or payoff, substitution,
satisfaction, release
and other like fees and charges, need not be credited by the
Master Servicer or
the related Servicer to the Distribution Account or the Master
Servicer
Collection Account, as applicable. In the event that the Master
Servicer shall
deposit or cause to be deposited to the Distribution Account any
amount not
required to be credited thereto, the Trustee, upon receipt of a
written request
therefor signed by a Servicing Officer of the Master Servicer,
shall promptly
transfer such amount to the Master Servicer, any provision
herein to the
contrary notwithstanding.
(c) The amount at any time credited to the Master
Servicer Collection Account may be invested, in the name of the
Trustee, or its
nominee, for the benefit of the Certificateholders, in Permitted
Investments or
be held in cash as directed by Master Servicer. All Permitted
Investments shall
mature or be subject to redemption or withdrawal on or before,
and shall be held
until, the next succeeding Distribution Account Deposit Date.
Any and all
investment earnings from the Master Servicer Collection Account
shall be paid to
the Master Servicer. The risk of loss of moneys required to be
distributed to
the Certificateholders resulting from such investments shall be
borne by and be
the risk of the Master Servicer. The Master Servicer shall
deposit the amount of
any such loss in the Master Servicer Collection Account within
two Business Days
of receipt of notification of such loss but not later than the
second Business
Day prior to the Distribution Date on which the moneys so
invested are required
to be distributed to the Certificateholders.
Section 5.07 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE
MASTER
SERVICER COLLECTION ACCOUNT. (a) The Master Servicer will, from
time to time on
demand of the Master Servicer or the Securities Administrator,
make or cause to
be made such withdrawals or transfers from the Master Servicer
Collection
Account as the Master Servicer has designated for such transfer
or withdrawal
pursuant to this Agreement and the related Servicing Agreement.
The Master
Servicer may clear and terminate the Master Servicer Collection
Account pursuant
to Section 11.01 and remove amounts from time to time deposited
in error.
(b) On an ongoing basis, the Master Servicer shall
withdraw from the Master Servicer Collection Account to pay
itself as provided
in Section 4.14 and to pay any expenses, costs and liabilities
recoverable by
the Trustee, the Master Servicer, the Custodian or the
Securities Administrator
pursuant to Sections 4.03, 8.03, 8.04 and 10.05; provided
however, that
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the Master Servicer shall be obligated to pay from its own funds
any amounts
which it is required to pay under Section 8.03(a).
(c) In addition, on or before each Distribution Account
Deposit Date, the Master Servicer shall deposit in the
Distribution Account (or
remit to the Trustee for deposit therein) any Advances required
to be made by
the Master Servicer with respect to the Mortgage Loans.
(d) No later than 3:00 p.m. New York time on each
Distribution Account Deposit Date, the Master Servicer will
transfer all
available funds on deposit in the Master Servicer Collection
Account with
respect to the related Distribution Date to the Trustee for
deposit in the
Distribution Account.
Section 5.08 DISTRIBUTION ACCOUNT.
(a) The Trustee shall establish and maintain in the name
of the Trustee, for the benefit of the Certificateholders, the
Distribution
Account as a segregated trust account or accounts.
(b) All amounts deposited to the Distribution Account
shall be held by the Trustee in the name of the Trustee in trust
for the benefit
of the Certificateholders in accordance with the terms and
provisions of this
Agreement.
(c) The Distribution Account shall constitute an Eligible
Account of the Trust Fund segregated on the books of the Trustee
and held by the
Trustee and the Distribution Account and the funds deposited
therein shall not
be subject to, and shall be protected from, all claims, liens,
and encumbrances
of any creditors or depositors of the Trustee (whether made
directly, or
indirectly through a liquidator or receiver of the Trustee). The
amount at any
time credited to the Distribution Account may be, as directed by
the Master
Servicer, held either uninvested in a trust or deposit account
of the Trustee
with no liability for interest or other compensation thereof,
except as
otherwise agreed in writing with the Master Servicer, or
invested in the name of
the Trustee, in such Permitted Investments as may be selected by
the Master
Servicer on such direction which mature not later than the
Business Day next
preceding the succeeding Distribution Date, except if such
Permitted Investment
is an obligation of or is managed by the institution that
maintains such fund or
account, then such Permitted Investment shall mature not later
than such
Distribution Date. Permitted Investments in respect of the
Distribution Account
shall not be sold or disposed of prior to their maturity. All
investment
earnings on amounts on deposit in the Distribution Account or
benefit from funds
uninvested therein from time to time shall be for the account of
the Master
Servicer. The Master Servicer shall be permitted to receive
distribution of any
and all investment earnings from the Distribution Account on
each Distribution
Date. If there is any loss on a Permitted Investment or demand
deposit, the
Master Servicer shall deposit the amount of the loss in the
Distribution
Account. With respect to the Distribution Account and the funds
deposited
therein, the Trustee shall take such action as may be necessary
to ensure that
the Certificateholders shall be entitled to the priorities
afforded to such a
trust account (in addition to a claim against the estate of the
Trustee)
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as provided by 12 U.S.C. ss. 92a(e), and applicable regulations
pursuant
thereto, if applicable, or any applicable comparable state
statute applicable to
state chartered banking corporations.
Section 5.09 PERMITTED WITHDRAWALS AND TRANSFERS FROM THE
DISTRIBUTION
ACCOUNT.
(a) The Trustee will, from time to time on demand of the
Master Servicer or the Securities Administrator, make or cause
to be made such
withdrawals or transfers from the Distribution Account as the
Master Servicer
has designated for such transfer or withdrawal pursuant to this
Agreement or any
Servicing Agreement or as the Securities Administrator has
instructed hereunder
for the following purposes (limited in the case of amounts due
the Master
Servicer to those not withdrawn from the Master Servicer
Collection Account in
accordance with the terms of this Agreement; provided that the
Trustee shall not
be responsible for such determination and may rely on the Master
Servicer's or
the Securities Administrator's instructions under this Section
5.09):
(i) to reimburse the Master Servicer, the Company or the
related Servicer for any Advance or Servicing Advance of its own
funds,
the right of the Master Servicer, the Company or the related
Servicer
to reimbursement pursuant to this subclause (i) being limited
to
amounts received on a particular Mortgage Loan (including, for
this
purpose, the Repurchase Price therefor, Insurance Proceeds
and
Liquidation Proceeds) which represent late payments or
recoveries of
the principal of or interest on such Mortgage Loan respecting
which
such Advance or Servicing Advance was made;
(ii) to reimburse the Master Servicer, the Company or the
related Servicer from Insurance Proceeds or Liquidation
Proceeds
relating to a particular Mortgage Loan for amounts expended by
the
Master Servicer, the Company or the related Servicer in good
faith in
connection with the restoration of the related Mortgaged
Property which
was damaged by an uninsured cause or in connection with the
liquidation
of such Mortgage Loan;
(iii) to reimburse the Master Servicer, the Company or the
related Servicer from Insurance Proceeds relating to a
particular
Mortgage Loan for insured expenses incurred with respect to
such
Mortgage Loan and to reimburse the Master Servicer, the Company
or the
related Servicer from Liquidation Proceeds from a particular
Mortgage
Loan for Liquidation Expenses incurred with respect to such
Mortgage
Loan; provided that the Master Servicer shall not be entitled
to
reimbursement for Liquidation Expenses with respect to a
Mortgage Loan
to the extent that (i) any amounts with respect to such Mortgage
Loan
were paid as Excess Liquidation Proceeds pursuant to clause (x)
of this
Subsection (a) to the Master Servicer; and (ii) such
Liquidation
Expenses were not included in the computation of such Excess
Liquidation Proceeds;
(iv) to reimburse the Master Servicer, the Company or a
Servicer for advances of funds pursuant to this Agreement or
the
related Servicing Agreement, and the right to reimbursement
pursuant to
this subclause being limited to amounts received on the
related
Mortgage Loan (including, for this purpose, the Repurchase
Price
therefor, Insurance Proceeds and Liquidation Proceeds) which
represent
late recoveries of the payments for which such advances were
made;
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(v) to reimburse the Master Servicer, the Company or a
Servicer for any Advance or advance, after a Realized Loss has
been
allocated with respect to the related Mortgage Loan if the
Advance or
advance has not been reimbursed pursuant to clauses (i) and
(vi);
(vi) to pay the Master Servicer as set forth in Section
4.14;
(vii) to reimburse the Master Servicer for expenses, costs
and liabilities incurred by and reimbursable to it pursuant to
Sections
4.03, 8.04(c) and (d) and 12.02 or otherwise reimbursable to
it
pursuant to this Agreement;
(viii) to pay to the Master Servicer, as additional
servicing compensation, any Excess Liquidation Proceeds to the
extent
not retained by the Company or the related Servicer;
(ix) to reimburse or pay the Company or the related
Servicer any such amounts as are due thereto under this
Agreement or
the related Servicing Agreement and have not been retained by or
paid
to the Company or the related Servicer, to the extent provided
herein
and in the related Servicing Agreement;
(x) to reimburse the Trustee, the Custodian or the
Securities Administrator for expenses, costs and liabilities
incurred
by or reimbursable to it pursuant to this Agreement (to the
extent not
reimbursed from the Master Servicer Collection Account in
accordance
with Section 5.07);
(xi) to remove amounts deposited in error; and
(xii) to clear and terminate the Distribution Account
pursuant to Section 11.01.
(b) The Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the
purpose of
accounting for any reimbursement from the Distribution Account
pursuant to
subclauses (i) through (iv), inclusive, and (vi) or with respect
to any such
amounts which would have been covered by such subclauses had the
amounts not
been retained by the Master Servicer without being deposited in
the Distribution
Account under Section 5.07.
(c) On each Distribution Date, the Trustee shall
distribute the Available Funds to the extent of funds on deposit
in the
Distribution Account to the holders of the Certificates in
accordance with the
Remittance Report upon which the Trustee may conclusively
rely.
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ARTICLE VI
DISTRIBUTIONS AND ADVANCES
Section 6.01 ADVANCES.
(a) The Company shall make an Advance with respect to any
EMC Mortgage Loan and deposit such Advance in the Master
Servicer Collection
Account no later than 1:00 p.m. Eastern time on the Remittance
Date in
immediately available funds. The Master Servicer shall cause the
related
Servicer to remit any such Advance required pursuant to the
terms of the related
Servicing Agreement. The Company or the related Servicer, as
applicable, shall
be obligated to make any such Advance only to the extent that
such advance would
not be a Nonrecoverable Advance. If the Company or the related
Servicer shall
have determined that it has made a Nonrecoverable Advance or
that a proposed
Advance or a lesser portion of such Advance would constitute a
Nonrecoverable
Advance, the Company or the related Servicer, as the case m
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